Whitbread share price: Group open to selling Costa Coffee or Premier Inn

By: Tsveta van Son
Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a… read more.
on Jun 8, 2018
Updated: Mar 11, 2020

Whitbread (LON:WTB) is open to selling its Costa coffee chain or Premier Inn hotels, Reuters has reported. The news comes after the FTSE 100 signalled earlier this year that it might spin off its coffee business.

Whitbread’s share price fell in the previous session, giving up 1.03 percent to close at 4,146.00p, underperforming the benchmark FTSE 100 index which ended trading 0.10 percent lower at 7,704.40 points. The group’s shares have added about 2.6 percent to their value over the past year, as compared with a three-percent rise in the Footsie.

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Whitbread mulls over business sale

Reuters reported yesterday that according to a new remuneration policy sent to shareholders this month, Whitbread was willing to consider a sale of either Costa Coffee or Premier Inn to another company. The circular further says that executives will be rewarded for separating the divisions “whether that is implemented by way of demerger or by way of the sale to a third party of all or substantially all of one or other of those businesses”.

This differs from the FTSE 100 group’s plan announced earlier this year which involves a demerger of its Costa Coffee business. A Whitbread spokeswoman meanwhile told the newswire that the purpose of the pay policy was to focus the management team on a spin-off.

“There is no sale process for either Costa or Premier Inn – demerging into two independent companies remains the strategic objective,” she pointed out.

Analysts on Costa Coffee owner

The 22 analysts offering 12-month price targets for Whitbread for the Financial Times have a median target of 4,315.00p on the shares, with a high estimate of 4,950.00p and a low estimate of 2,000.00p. As of June 1, the consensus forecast amongst 27 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.

As of 08:37 BST, Friday, 08 June, Whitbread plc share price is 4,146.00pp.

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