Rolling coverage of the latest economic and financial news, with UK interest rates expected to be cut to 3.75% at noon
Back in the City, shares in hotel group Whitbread have jumped by 5.5% after an activist investor took a stake in the company.
Corvex Management has concluded that Whitbread, which owns the Premier Inns chain, is undervalued, and should review its current five-year capital plan.
“Corvex invested in Whitbread because we believe the current market price reflects not only a discount to the Company’s fundamental value, but a discount to the value of the Company’s fully owned and operated UK freehold hotel portfolio alone. In our view, the current share price appears to ascribe no value to several meaningful components of the Company’s business, including its UK operated leasehold portfolio, its German hotel assets, and its development properties currently under construction and not yet trading.
“In light of this valuation disconnect, and following the recently announced UK Budget and changes to rateable values and business rates, we believe the Company should undertake a strategic review to assess its capital allocation priorities and overall strategic direction.”
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