Premier Inn owner Whitbread under pressure to split its business

Corvex Management has disclosed a 6 per cent stake in Whitbread and called for a strategic review of the FTSE 100 company

US activist investor Corvex Management has taken a 6% stake in Whitbread and is urging the Premier Inn owner to conduct a strategic review, citing what it described as a disconnect between the group’s share price and the underlying value of its assets, according to a report by the Financial Times. The hedge fund, led by Keith Meister, said higher business rates announced in the UK Budget last month have increased pressure on Whitbread’s cost base and warrant a reassessment of its £3.5bn five-year investment plan and broader strategic direction. Corvex said it intends to seek board representation as part of its engagement with the company.

Whitbread operates around 850 hotels across the UK and Germany, primarily under the Premier Inn brand, alongside restaurant chains including Beefeater and Brewers Fayre. The company’s growth strategy includes further expansion in Germany, where it currently operates 11,000 rooms, with a further 9,000 planned, and a commitment to return up to £2bn to shareholders by 2030.

Responding to the announcement, Whitbread said it has a “clear strategy” and is continuing to explore options to improve margins and returns following changes to business rates. The group has estimated the increase in business rates will add £40m–£50m to its costs