31st Aug 2018 07:21
LONDON (Alliance News) - Whitbread PLC on Friday said it has agreed to sell its Costa Coffee business to The Coca-Cola Co for GBP3.9 billion.
Whitbread, which also owns the Premier Inn hotel chain, is expecting net proceeds of GBP3.8 billion, and said most of this will be returned to shareholders.
The sale, the company continued, will reduce debt and also allow for an increased pension contribution and further expansion of Premier Inn in both the UK and Germany.
Whitbread believes a "substantial" premium would have been created due to its planned demerger of Costa Coffee, which was announced in April this year.
Chief Executive Alison Brittain said: "I am delighted we have agreed the sale of Costa to Coca-Cola for GBP3.9 billion. This transaction is great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential and accelerates the realisation of value for shareholders in cash.
"Premier Inn, the UK's leading hotel business, will continue to develop its highly successful and unique business model, with even greater focus and financial investment. Premier Inn will continue to take advantage of the considerable structural growth opportunities in the UK and accelerate its network expansion in Germany. This will deliver strong return on capital and significant value to shareholders over the long term."
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