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Whitbread Plc - Tender Offer

Whitbread PLC proposes tender offer to return up to £2 billion to Shareholders

Whitbread PLC ("Whitbread" or the "Company") announces the proposed return of up to £2 billion to Shareholders by way of a tender offer, as the second phase of a potential three-phase return of capital programme.

On 3 January 2019, the Group completed the sale of Costa to The Coca-Cola Company (the "Disposal") for an enterprise value of £3.9 billion. After adjustment for transaction and separation costs, the net cash proceeds from the Disposal were £3.8 billion (the "Net Cash Proceeds"). 

At the Company's Capital Markets Day held on 13 February 2019, Whitbread announced its intention to return a total of at least £2.5 billion of the Net Cash Proceeds to Shareholders, subject to any more value-creating alternative uses for the cash, through a three-phase programme.

The first phase has now been completed, with approximately £480 million returned to Shareholders through the repurchase of Ordinary Shares pursuant to the Company's share buyback programme, which ended on 10 May 2019 (the "Share Buyback Programme").

The Board has decided that the appropriate second phase is to conduct a tender offer to return a maximum of £2 billion (the "Tender Offer", which is summarised below). This phase of the return of capital 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.

Shareholders may decide not to participate fully or partially in the Tender Offer for a number of reasons, including their view of the potential for the value of the Company to increase in the future. If less than £2 billion is returned through the Tender Offer, the Board will consider a possible third phase to return any remaining surplus cash following completion of the Tender Offer.


Key elements of the Tender Offer

·   £2 billion is available to be returned to Qualifying Shareholders via the purchase of up to 43,466,603 Ordinary Shares (representing up to approximately 24.99 per cent. of the Issued Ordinary Share Capital).

·   Ordinary Shares may be tendered within a price range based on and expressed by reference to the average market price at which Ordinary Shares trade (known as the "volume-weighted average price" or "VWAP") in the five-day period up to and including the Tender Offer closing. 

·   The VWAP-based prices in the price range extend (in one per cent. increments) from a flat VWAP-based price (with no premium or discount) to a price that is a four per cent. premium over the VWAP-based price.

·   A price cap of £50.00 per Ordinary Share has been set as the highest monetary amount at which any Ordinary Share will be purchased under the Tender Offer. The price cap represents the approximate volume-weighted average price of Ordinary Shares for the last 30 days (being the period following the Company's announcement of its preliminary results for the financial year ended 28 February 2019 on 30 April 2019 up to and including the Latest Practicable Date), plus a premium of 10 per cent.

·   All successfully tendered Ordinary Shares will be acquired at a single price (the "Strike Price", as described in further detail in section 2 below of this announcement).

·   The Tender Offer is conditional on, among other things, the approval of Shareholders, which will be sought at a general meeting of the Company to be held at 2.45 p.m. on 19 June 2019 (or as soon thereafter as the Company's AGM convened for that date has concluded or been adjourned) (the "General Meeting").

·   Subject to approval by Shareholders, the Tender Offer will open on 20 June 2019 and will close at 1.00 p.m. on 19 July 2019.

·   The absolute price (in pounds and pence per Ordinary Share) to be paid to successfully participating Qualifying Shareholders will be announced as soon as this has been determined, which is expected to be on 22 July 2019, together with the results of the Tender Offer.

·   Proceeds are expected to be despatched to Shareholders who successfully tender Ordinary Shares on 30 July 2019.


Benefits of the Tender Offer

·   Available to all Qualifying Shareholders regardless of the size of their holdings.

·   Provides Qualifying Shareholders who wish to reduce their holdings of Ordinary Shares with an opportunity to do so at a market-driven price with the possibility of a modest premium.

·   Shareholders who wish to retain their current investment in Ordinary Shares are not required to participate in the Tender Offer.


The Tender Offer will reduce the number of Ordinary Shares in issue, and so should, assuming earnings stay the same, have a positive impact on the Group's earnings per share (as the Company intends to cancel all of the Ordinary Shares acquired in connection with the Tender Offer). 

A shareholder circular (the "Circular") containing the full terms and conditions of the Tender Offer and instructions to Qualifying Shareholders on how to tender their Ordinary Shares should they wish to do so, and convening the General Meeting, will be despatched to Shareholders today. The Circular will also be available on the Company's website at

Copies of the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at

This summary should be read in conjunction with the full text of the announcement and the Circular.