Hospitality group and Premier Inn owner Whitbread has slammed the activist investor seeking representation on its board, insisting its proposals would amount to a "complete waste" of both time and money.
The FTSE 100 giant wrote to shareholders on Tuesday, urging them to vote against the plans put forward by Corvex Asset Management, one of the company's most significant shareholders.
Corvex's accusations and Whitbread's response
Corvex has levelled accusations at Whitbread of "chronic misallocation of capital" and a misguided "commitment to the status quo", calling for a "rigorous, fact-based review" of the firm's strategy.
The Premier Inn owner, however, fired back at the investor, insisting that its recent internal review had produced "a significant evolution of Whitbread's strategy and establishes clear and measurable commitments".
"The board believes that duplicating the business and strategic review which has only just finished would be a complete waste of company – and shareholder – resources," it told shareholders, as reported by City AM.
"It would also destroy the momentum we are seeing and delay and compromise the delivery of value that the Five-Year Plan is on course to create."
Shifting position and upcoming vote
Whitbread also took aim at Corvex for shifting its position. Back in May, the investor had pushed for the group to put itself up for sale, yet has since claimed it has "no pre-determined agenda" regarding the company's future.
"We want to work with the board in a collegiate and non-adversarial way, as one member among many, bringing a direct shareholder perspective to these decisions," Corvex managing partner Keith Meister said.
Whitbread has scheduled a general meeting for November 9, at which shareholders will cast their votes on whether to install Corvex's James Gemmel onto the company's board. The hospitality giant has urged investors to reject the proposal.
Financial impact and strategic progress
The group disclosed on Tuesday that its turnaround strategy had resulted in a £178m charge against profits, following the disposal of its entire restaurant portfolio and the cutting of almost 4,000 jobs. The charge pulled pre-tax profit down to £109m for the 12 months to the end of August, representing a 62 per cent decline on the previous year.
Whitbread said its revised strategy is gathering momentum, highlighting 4.5 per cent growth in accommodation sales across the UK and Ireland, alongside £39m in cost savings.
Chief executive Dominic Paul said: "With excellent strategic progress and strong current trading momentum, our plan is working. Against this positive backdrop, the Board strongly recommends that all shareholders vote against the resolution proposed by Corvex at the forthcoming shareholder meeting."
