Activist Corvex seeks Whitbread board seat over strategy concerns

Investing.com -- On Tuesday, activist investor Corvex Management revealed that it has requisitioned a general meeting of Whitbread (LON: WTB) shareholders to elect one of its partners to the board of the Premier Inn owner, escalating a campaign against a company it says has underperformed.

Corvex, the New York firm founded by Keith Meister, has held Whitbread stock since 2024 and owns about 6.4% of the shares, with an economic interest of roughly 7%, making it what it calls the company's largest active shareholder.

It is seeking a single seat for partner James Gemmel.

The fund said Whitbread had delivered negative total shareholder returns of about 17% over 10 years, 18% over five years and 22% over the past year, trailing peers and the wider market.

Since selling the Costa coffee chain in 2018, it said, Whitbread has spent around £2.6 billion on growth investment while producing roughly 3% earnings-per-share growth a year and a flat dividend.

Corvex added that a further £2.5 billion of planned capital spending over five years warranted direct shareholder representation, noting the board owns about 0.04% of the company.

"We are not seeking control, nor are we demanding a sale of the Company," Corvex wrote in a letter to the board, saying it wanted to work "in a collegiate and non-adversarial way" to benchmark strategy against alternatives.

Corvex pointed to Gemmel's board roles at Kindred Group, where he helped negotiate a takeover by FDJ, and MDU Resources, which it said generated a 140% return for shareholders.

Whitbread's board must now decide whether to call the meeting. Corvex said the company had shown "limited willingness to meaningfully engage."

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