US company declares 3.4% stake in Whitbread

08 December 2017 by
US company declares 3.4% stake in Whitbread

An American investment company has secured a 3.4% stake in Whitbread, the owner and operator of two of the UK's largest hospitality brands, Premier Inn and Costa.

Sachem Head, a company with $4b in assets under management, has declined to comment about its intentions with regards to Whitbread; however, it could indicate a move towards a demerger of one of the brands.

Scott Ferguson founded Sachem Head in 2013, having previously worked at Pershing Square Capital Management, American Industrial Partners and McKinsey & Co.

The share price of Whitbread jumped 308p to £40 upon news of the Sachem Head investment. Over the past two and a half years the company's share price has steadily fallen from a high of £54.30 in March 2015.

In its half-year results to 31 August 2017, Whitbread said it was cautiously optimistic about meeting its annual financial targets after achieving revenue growth of 7.4% to £1.7b, with underlying profit growth of 6.7% to £328m. Net debt was said to have been reduced to £852m.

Premier Inn has more than 770 hotels with around 70,000 rooms, and is set to grow to 85,000 rooms by 2020. Costa numbers around 2,300 coffee shops.

Whitbread sees half-year revenue growth of 7.4% >

Premier Inn growth drives Whitbread sales up 7.6% >>

Whitbread grows again in 2016/17 but warns of tougher outlook >>

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