July 19, 2019 / 11:09 AM / 2 months ago

Activist hedge fund Elliott trims stake in UK's Whitbread

(Reuters) - Activist investor Elliott Capital Advisors has trimmed its stake in Premier Inn owner Whitbread (WTB.L) to below 5%, a filing here on Friday showed.

FILE PHOTO: A bed is seen at a Premier Inn hotel in Liverpool, Britain April 12, 2018. REUTERS/Darren Staples

The Sunday Telegraph reported in May that Elliott had become increasingly frustrated with Whitbread’s strategy of owning Premier Inn hotels outright and wanted the company to offload chunks of its property portfolio.

According to the report, the activist investor believes Whitbread’s strategy is depressing the company’s share price and is leaving it open to a cut-price hostile takeover.

The company declined to comment further. Elliott previously held a stake of 5.30% in Whitbread, a filing from April last year showed here

Last August, Whitbread agreed to sell its almost 4,000 Costa coffee shops to Coca-Cola Co (KO.N) for $5.1 billion after pressure from hedge funds, including Elliott, which said the coffee chain was held back by being grouped with the Premier Inn hotel chain.

Whitbread, which has been focusing on the hotel business after the sale of its Costa Coffee chain, reported lower room revenue last month as companies cut back on business travel.

New York-based Elliott, with assets under management of about $35 billion, has a history of building up minority stakes in takeover targets with a view to securing an improved bid.

Elliott, Paul Singer’s hedge fund, committed $3.4 billion in new capital in the first six months of 2019, data compiled by Lazard shows, outpacing Carl Icahn who spent $2.8 billion.

Elliott disclosed a stake in Saga Plc (SAGAG.L) this week, less than a month after the specialist tourism and insurance firm warned discounting was hurting its tours business.

The hedge fund also recently built up a position in France’s Altran Technologies (ALTT.PA) in the wake of a 3.6 billion-euro (£3.23 billion) buyout bid by its bigger rival Capgemini (CAPP.PA).

Shares in Whitbread were 0.21% higher at 4,897 pence at 1242 GMT after moving sharply lower earlier.

Reporting by Noor Zainab Hussain and Tanishaa Nadkar in Bengaluru and Simon Jessop in London; Editing by Shailesh Kuber

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