Whitbread asks holders to reject Corvex bid for a board seat

Whitbread, the owner of the Premier Inn hotel chain, scheduled a shareholder meeting for November 9 and told investors to vote against a demand by US hedge fund Corvex Management for a seat on its board, according to Finimize.

Corvex, which had earlier pressed for a sale of the company, has narrowed its campaign to securing a single director, saying the appointment would help "maximize risk-adjusted value."

Whitbread's management is defending a five-year plan already under way. It calls for leaving the remaining 197 branded restaurants, disposing of £1.5 billion of freehold property and cutting costs, a program that could involve roughly 3,800 job reductions.

The company pointed to recent trading as evidence the strategy is working. First-half adjusted pretax profit came in ahead of expectations, the full-year outlook was left unchanged, and over a five-week stretch ending October 1 accommodation sales grew 4.5% in the UK and 31.2% in Germany, Finimize reported.

A win for Corvex could push investors to expect faster action on the property disposals and deeper cost cuts, while adding uncertainty over strategy partway through the turnaround. A clear victory for the board would reduce the chance of a sudden change in direction and shift attention to whether the existing plan can hold margins as hotel operating costs stay elevated.

This story was first reported by Finimize.