Activist Elliott trains shareholder value guns on Whitbread

Elliott Advisors wants Whitbread to float Costa Coffee in order to raise £3 billion sources say

Elliott Advisors wants Whitbread to float Costa Coffee in order to raise £3 billion sources say Getty Images

Past year in December, US hedge fund Sachem Head acquired a 3.4% stake in Whitbread, and made a series of demands to the group including a split of the business, the sale of property assets and a share buyback.

'In a nutshell, there is a widely-held belief that Whitbread should separate its Costa Coffee business from the Premier Hotels operation, ' explains Russ Mould, investment director at investment platform AJ Bell. Having bought into the company almost a year ago, the hedge fund's stake was reported by The Sunday Times to be worth about £430 million now.

Elliott Advisors had confirmed this weekend that it now has over a 6 per cent stake in FTSE 100-listed firm.

A spokeswoman for Whitbread declined to comment.

Whitbread's share price rose on Friday, adding 3.31 percent to close at 3,935.00p, outperforming the broader United Kingdom market, with the benchmark FTSE 100 index ending the session 0.09 percent higher at 7,264.56. The company's shares are down almost 5 percent in the past 12 months.

The company has become more streamlined in the past few years, selling off its brewing business and some pubs to focus mainly on Premier Inn, Costa, the Beefeater restaurant brand and the Brewers Fayre pub restaurant chain.

Recently, it backed Melrose's £8.1bn hostile takeover of engineering group GKN.

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