Whitbread shares soar 19% on shock Coke deal

Agreed to sell Costa Coffee

Whitbread shares soared 19% in early morning trading on its surprise agreement to sell its Costa coffee chain to Coca-Cola for £3.9bn including debt.

The UK leisure group has been pressurised by activist investors - such as Elliott Advisors, which joined the shareholder register in April - to separate its business this year, prompting Whitbread to announce a demerger with Costa initially set to be listed as a separate business by 2020. However, in a change of tack, the deal with Coca-Cola means Whitbread can now focus on the Premier Inn hotel business. Costa was bought by Whitbread 23 years ago for £19m, and has since increased its chain from 39 outlets to over 2,400 in the UK and 1,400 in more than 30 international markets. Chi...