Whitbread Urges Shareholders to Reject Corvex Board Proposal
Whitbread is fighting a bid by activist investor Corvex Management to appoint a board member while navigating UK tax hikes and a major restructuring.
Hospitality firm Whitbread, owner of Premier Inn, is urging shareholders to reject a proposal from activist hedge fund Corvex Management to appoint James Gemmel to its board. Corvex, the company's third-largest shareholder with a 6.4% stake, has accused the firm of chronic misallocation of capital and previously suggested separating hotel operations from property assets to improve returns. Shareholders will vote on the resolution at a general meeting on November 9.
Chief Executive Dominic Paul defends a five-year turnaround plan to pivot toward a pure-play hotel model. This strategy involves closing 197 branded restaurants, including Beefeater and Brewers Fayre, and selling £1.5 billion in freehold property. While the company reports sales growth in the UK and Germany, restructuring costs of £178 million contributed to a 62% drop in annual pre-tax profit to £109 million.
Adding to these pressures, Paul warned that UK tax hikes and rising labor costs have forced the company to reduce planned hotel investments and job creation. He specifically cited the end of pandemic-era business rates relief and upcoming property valuations as factors that have hammered the industry. Paul has called for a freeze on property taxes in the upcoming autumn Budget and cautioned against proposed visitors' levies on overnight stays.
