Whitbread urges shareholders to reject Corvex board bid

what happened

Whitbread, the owner of Premier Inn, reaffirmed its five-year turnaround programme on Tuesday and advised shareholders to vote against activist investor Corvex Management’s request for representation on the board. The information was reported by Newsmetry API.

Britain’s biggest hotel operator is defending a strategy that includes job reductions and the shutdown of restaurants operated under its own brands. Corvex intensified its campaign last month by seeking a board seat.

Whitbread said shareholders will meet on November 9 to consider Corvex’s resolution to appoint an additional director. Separately, first-half adjusted pre-tax profit came in above expectations, while the company retained its full-year guidance. Hotel performance in the UK and Germany helped absorb higher costs and the effects of leaving the branded restaurant business.

why it matters

The dispute puts execution of Whitbread’s five-year programme under closer scrutiny. Better-than-expected first-half profit and unchanged guidance support management’s position, while restructuring costs and Corvex’s campaign remain key issues for shareholders.

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