Activist Elliott now largest shareholder in Whitbread

Activist Elliott now largest shareholder in Whitbread

Shares in Whitbread soared by 6.6 per cent after Elliott, the USA hedge fund, confirmed that it has become the largest shareholder in the company.

According to City sources, Elliott is pushing for Whitbread to spin off Costa through a float in an effort to create as much as £3 billion of additional value.

Months of research into the pensions and tax implications of such a...

Its intervention comes almost three months after Reuters reported that another activist investor, Sachem Head, wanted Whitbread's management to examine a breakup as a way to boost the value of its individual businesses.

That sparked a near 7% jump in Whitbread's share price on Monday to £41.97, the highest the stock has been in almost a year.

A spokeswoman for Whitbread has declined to comment.

U.S. hedge fund Sachem Head has a 3.4% stake in Whitbread and has pressed the management to consider a break up of the business as well as a sale and leaseback of its Premier Inn hotel properties.

He estimated the separate businesses would have a total market capitalisation of 10 billion pounds ($14.3 billion) from around 7.2 billion pounds now, a 38 percent increase. Singer's hedge fund also does not want Whitbread to take on more debt, leverage or offer further share buybacks. As of April 13, the consensus forecast amongst 27 polled investment analysts covering the Costa Coffee and Premier Inn owner advises investors to hold their position in the company. "Why not separate?" an investor told Reuters last month.

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