Whitbread (LON:WTB) has moved one step closer to completing the sale of its Costa Coffee business to The Coca Cola Company as China gave its approval for the deal. The news comes after the FTSE 100 group’s shareholders overwhelmingly backed the £3.9-billion sale last month.
Whitbread’s share price has slipped marginally into the red in today’s session, having lost 0.38 percent to 4,685.00p as of 14:46 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.76 percent higher at 7,057.57 points. The group’s shares have added more than 28 percent to their value over the past year, as compared with about a 4.6-percent dip in the Footsie.
China clears Costa Coffee sale
Whitbread announced in a statement today that China’s State Administration for Market Regulation had given clearance for The Coca-Cola Company to acquire Costa Coffee, including the unit’s operations in China.
The FTSE 100 group noted that clearance was still needed from the European Union under the EC Merger Regulation before the transaction could complete and that certain completion deliverables remained outstanding including an agreement still to be reached with the Trustees of the pension fund.
Whitbread has promised to return ‘a significant majority’ of the proceeds to investors and expects the deal to complete in the first half of next year.
Analysts on Premier Inn owner
The 17 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,900.00p on the shares, with a high estimate of 5,900.00p and a low estimate of 2,000.00p. As of November 24, the consensus forecast amongst 22 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.