Whitbread Soars as Elliott Discloses Stake in Costa Owner

(Bloomberg) -- Shares of Whitbread Plc, the operator of Costa Coffee shops and Premier Inn hotels, rose the most in nine years after activist investor Elliott Management Corp. disclosed a 6 percent stake, making it the company’s largest shareholder.

Elliott Advisors U.K. Ltd., a London-based affiliate of billionaire Paul Singer’s investment firm, said on Saturday that it owned the Whitbread stake. Elliott joined the shareholder roster after another activist fund, Sachem Head, disclosed a 3.4 percent stake last year and was reported in February to be seeking a breakup of the company.

The stock rose as much as 8.6 percent to 4,273 pence on Monday, the steepest intraday gain since 2009. While Elliott didn’t disclose its intentions in its statement, the hedge fund has presented Whitbread management with a plan to split its Premier Inn and Costa Coffee divisions, the Financial Times reported.

Elliott has a history of campaigning to wring out value from the stakes it buys, and it’s played a key role in major European takeover battles. The hedge fund was an investor in SABMiller Plc in 2016 at a time when the brewer was being courted by rival Anheuser-Busch InBev NV, and last month backed Melrose Industries Plc’s hostile bid for aerospace supplier GKN Plc.

The fund is involved in efforts to unify BHP Billiton Ltd.’s shareholding structure. In a separate campaign, it’s seeking to oust Telecom Italia SpA directors linked to French media giant Vivendi SA. It has also built a position in U.K. software company Micro Focus International Plc, according to people familiar with the matter.

During Chief Executive Officer Alison Brittain’s more than two years at the helm, Dunstable, England-based Whitbread has sought to simplify its operations by shrinking or exiting ventures in India, Thailand and Singapore while focusing on fast-growing markets such as China. Brittain has so far resisted calls to split the company.

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