Premier Inn owner Whitbread hits out at ‘destructive’ activist investor

Whitbread, the owner of Premier Inn, has criticized activist investor Corvex Asset Management for proposing a seat on its board, arguing their demands would be a "complete waste" of time and money. The FTSE 100 hospitality firm urged shareholders to reject Corvex's plans in a letter sent to them on Tuesday. Corvex has accused Whitbread of "chronic misallocation of capital" and a misguided "commitment to the status quo," calling for a "rigorous, fact-based review" of the company's strategy.

Whitbread, however, responded by stating that Corvex's recent company review had resulted in "a significant evolution of Whitbread’s strategy and establishes clear and measurable commitments." The Premier Inn owner's board believes that duplicating this review would be a waste of resources and delay the delivery of value promised by the Five-Year Plan.

Corvex's managing partner, Keith Meister, had initially called for the group to put itself up for sale but later stated that they have "no pre-determined agenda" for the company's future. The company has called a general meeting on November 9, where investors can vote on whether to appoint Corvex's James Gemmel to the board. Whitbread has urged investors to vote against this proposal.

The company reported a £178m hit to profit from its turnaround plan, which involved selling all its restaurants and shedding nearly 4,000 staff, dragging pre-tax profit to £109m in the 12 months to August, a 62% decrease from the previous year. Despite this, Whitbread's new strategy is gaining momentum, with 4.5% accommodation sales growth in the UK and Ireland and £39m in cost savings.

CEO Dominic Paul stated that the company's plan is working and recommended that all shareholders vote against the resolution proposed by Corvex.