Pressure grows to split leisure giant into two divisions.
Shares in Whitbread rocketed on Monday after activist investor Elliott revealed it has become the firm’s largest shareholder, with pressure expected to be applied to break up the Costa Coffee and Premier Inn owner.
Elliott now owns over 6 per cent of Whitbread, the firm confirmed, and it is understood that it will now push for Costa and Premier Inn to become two separate listed entities.
Costa is thought to be worth between £2bn and £3bn while Premier Inn is valued at up to £8bn.
Elliott, which has a reputation for corporate activism, is understood to consider the pairing of Costa and Premier Inn under Whitbread to be an anomaly with no synergies.
It is not the first time Whitbread has been targeted by an activist.
US hedge fund Sachem Head owns a 3.4 per cent stake in the firm and is also thought to be pushing for a separation of the two brands.
Analysts said that the positions taken by the pair piles further pressure on Whitbread boss Alison Brittain, pictured.
David Madden, market analyst at CMC Markets, said: “Whitbread shares are in demand after the activist investor Elliott Advisors stated they now own more than 6 per cent of the company – making them the largest shareholder. The investment company is pushing for a demerger of the group, so Costa Coffee and Premier Inn would be two separate companies.”
Ms Brittain has previously said she remains “entirely open-minded about the structure of the business”.