31st May 2019 09:24
LONDON (Alliance News) - Whitbread PLC proposed to return up to GBP2 billion to shareholders Friday in the second phase of a GBP2.5 billion capital return programme.
The capital return was initially announced after the sale of the its Costa Coffee chain in August to soft drinks company Coca Cola Co, who agreed to pay GBP3.9 billion for the unit.
As part of the first phase the company launched an initial share buyback programme in January to repurchase up to GBP500 million by April-end, which was completed in May with Whitbread returning GBP480 million.
Now, the company is launching a new tender offer to purchase up to 43.5 million shares, which represents about 25% of Whitbread's issued share capital, in the hope of returning GBP2 billion to shareholders.
The tender price is capped at GBP50 per share and will be calculated on the volume-weighted average price of the shares in the five day period before the tender offer closes, which is currently set at July 19.
On Friday morning, Whitbread shares were up 2.0% at GBP46.38 each.
When the sale of Costa was announced Whitbread said it would return GBP2.5 billion to shareholders. Due to this promise, the company said Friday if less than GBP2 billion is returned in this phase it will consider a possible third phase to return any remaining surplus cash.
Whitbread said the second phase of the return programme is "designed to balance efficiency with recognising the interests of continuing versus exiting shareholders, rather than being designed solely to maximise the amount returned".
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