Whitbread Share Discussion Threads

[philanderer] 24/7/2019 12:21

'Whitbread shares wilt after £2bn tender'

Premier Inn owner Whitbread’s (WTB) will distribute £2 billion to shareholders following an oversubscribed tender offer but Shore Capital says the stock could come under pressure after the company said it was not planning to return more capital.

Analyst Greg Johnson retained his ‘hold’ recommendation on the stock on Monday, which slipped 4.4%, or 217p, to £46.85 after Whitbread said it would buy 40.2 million of its shares at a strike price of £49.72. The £2 billion this represents takes to £2.5 billion the amount of capital returned by the company. The shares slipped another 3.4% to £45.25 on Tuesday.

‘As the leading UK hotel operator, Whitbread has significant asset backing and limited debt - We see c.£53 as fair value [on the shares] on a property-adjusted basis,’ he said.

‘However, the recent trading backdrop has been soft and we see risk to current year forecasts. Removal of the support from the tender offer could see the shares come under pressure on a near-term trading outlook.’

Johnson added that ‘holding current levels immediately post the tender offer, which we believe would effectively be pricing in some further corporate activity, could provide an opportunity to take a more negative stance’.

[philanderer] 24/7/2019 12:17

'Hotel owner far from sleeping easy'

[mozy123] 24/7/2019 10:45

The £ weakness is going to be a big boost for Premier. UK holiday makers will feel the pitch abroad and may stay in the UK, but foreign torists will be flooding in with more £'s in thier pocket. Good for the sector.

[philanderer] 23/7/2019 23:40

Market report:

Whitbread shares suffered after Bernstein Research and Merrill Lynch downgraded its stock and gave it a 4200p target price.

It ended down 3 per cent, or 142p, at 4543p. The FTSE 100 index had a cheerier day as it hit its highest level in more than two weeks, rising 0.6 per cent, or 41.93 points, to 7556.86, while the FTSE 250 lifted 0.5 per cent, or 104.33 points, to 19,752.34.

[sabjcm] 23/7/2019 16:50

No point in moaning. This is capitalism and dog eat dog. We just need to get used to it and wise up. Let’s hope we can learn for the next time

[philanderer] 23/7/2019 13:36

And...

Premier Inn-owner Whitbread (WTB) continued losses from the previous session, after saying it would not return any more capital to shareholders, which prompted analysts at Liberum to cut its target price on the stock. This sent shares down a further 4% to £45.11.

Citywire

[philanderer] 23/7/2019 12:52

Midday market report:

"...On the downside, Premier Inn owner Whitbread was weaker after a downgrade to 'underperform' at Bernstein."

[philanderer] 23/7/2019 09:59

Morning EI :-)

[essentialinvestor] 23/7/2019 09:41

A cynic might suggest the share price appeared pumped up somewhat pre tender offer,
I'm not suggesting that obvs ).

[new life] 23/7/2019 09:36

Helpful that, lolI get the basics-don't get how a big shirt actually influences share price unless they have insider info. Here's another daft one, are the tender shares all cancelled ?

[philanderer] 23/7/2019 08:59

Yes , dreadful performance . Looks like a 2019 low coming up shortly.

[bountyhunter] 23/7/2019 08:53

The phrase 'couldn't manage a p*ss up in a brewery' comes to mind. Small shareholders now come last. This used to be a very well run company with PIs appreciated but has since gone downhill, is that why it's being shorted?

[grant09] 23/7/2019 08:51

The board will be taking an early bath when this hits the pre Costa sale price!

[retsius] 23/7/2019 08:03

New Life

Job for the day: look up Shorting on a financial website.

[joe say] 22/7/2019 19:21

Shall be voting against this board the next time round - muppets imo

[new life] 22/7/2019 18:22

Will show my nativity here but how does a company who is shorting stock actually influence share price?Aren't they just betting price will fall based on the info around at that time ?

[philanderer] 22/7/2019 18:13

Not sure about this..

"Given the stock is still up over 12% from when the enormous capital return was announced, today's move seems like profit taking," commented David Madden at CMC Markets.

Alliance News

[silver1944] 22/7/2019 15:34

My wife held 500 shares in her ISA. I advised her that the only way you are not going to lose out is to take part in the tender offer. She put all her holding up at the Strike price. On 30th July she will get back £49.72 per share. I said you can always buy them back later at a cheaper price. She has decided not to buy them back. WTB have sold the jewel in the crown Costa. Beefeater has a lot of competition. Premier Inn move into Germany is a gamble IMHO

[porsche1945] 22/7/2019 15:31

Investors scant reward for Coke deal. Would have been better off keeping the coffee and dumping the hotel chain which is defo on the wane especially as UK enters brexit recession. Special dividends would have been better, get real cash back to shareholders. Buy back has achieved sweet fa and its likely they have paid a very high price, companies always buy back at the wrong time. Dividend poor and business model under pressure with very average management. Sold mine two weeks ago. Best hope now is a sale and leaseback on the estate.

[mozy123] 22/7/2019 15:16

Not sure I get the same high valuation.

191m shares
17.1m in tresuary
40.2 just taken out in the tender
133.6m shares out left

@46.79 a share thats a market cap of £6.2bn
Pre tax expected at £400m for FY20

15.7 times earnings?

[commuter10] 22/7/2019 15:05

Interesting reading the above statement from WTB. Strike price of £49.72 just under the maximum of £50.00. Quite surprised the offer was over subscribed as it was poorly explained to shareholders but expect a lot of institutional stakeholders cashed in. I'm quite happy to hold on to my managed shares & keep taking the dividends until the next buy back announcement.

[philanderer] 22/7/2019 13:41

Goodbody note:

Whitbread has this morning announced the result of its tender offer, with £2bn to be returned to shareholders via the purchase of 40.3m shares at a strike price of £49.72.

The tender offer was oversubscribed. The strike price represents the average variable average weighted price plus an amount equal to 2% of the average VWAP.


Tender offers will be accepted as follows:

(i) all ordinary shares tendered at a price below the strike price or tendered as a strike price tender will be accepted and purchased in full;

(ii) ordinary shares validly tendered at the strike price of average VWAP +2% will be scaled down so the total cost of the shares repurchased does not exceed £2bn. This means that 66.8% of shares validly tendered at this price will be accepted and purchased; (iii) all ordinary shares tendered at a higher purchase price than the strike price (being average VWAP +3% and average VWAP +4%) will be rejected and will not be purchased in the tender offer.

The group completed a £482m share buyback earlier this year and following this completion of the tender offer, which will result in £2bn shares being repurchased, Whitbread will have returned a total of £2.5bn to shareholders. The statement notes that the company is not planning on any further returns of capital.


Given our concerns around the UK macro backdrop, soft trading in Regional UK YTD (Q120 RevPAR: -6.4%), and lack of visibility on forward trading around short lead corporate travel (c.25% of bookings) we believe risk to Whitbread numbers remains to the downside. We previously highlighted that the tender offer was providing a valuation support.

However, following the completion of this capital return, and confirmation there will be no further return, we believe that at c.23x FY20 P/E and 19x FY21 P/E valuation looks high given the weak trading outlook.

[philanderer] 22/7/2019 13:33

Short-sellers said to be placing £1.5bn bet against Whitbread

Shares of Premier Inn owner Whitbread were under pressure on Monday as it emerged that they could be a target for short-sellers.

According to The Sunday Telegraph, Manhattan-based specialist high-frequency trading firm Jane Street Global Trading is leading a £1.5bn bet by hedge funds against the company. Jane Street was said to have the biggest short position against Whitbread.

According to IHS Markit, around 17.6% of Whitbread's stock is on loan to those betting against it.

[new life] 22/7/2019 12:46

Why didn't they just pay a special dividend? Then everyone benefits equally? Better still use money to build the business. Feels like they have given up.

[retsius] 22/7/2019 12:26

jeffian

Understand your sentiments exactly.

One thing running a company, the other is manipulation by massive shorting funds working on computerised programmes.

They should have followed Lord Weinstock`s example, keep hold of your massive capital reserves

.Esp. with Brexit, Trump, Iran, etc etc.....


R.