Whitbread to sell Costa to Coca Cola for £3.9bn

by XPRESS, 11 October 2018

Whitbread shareholders have overwhelmingly approved the sale of Costa Coffee to Coca-Cola for £3.9bn.

At a general meeting yesterday (Wednesday, 10 October), a total of 116,220,495 (99.27%) votes were cast in favour of the deal with just 849,657 (0.73%) against.

There were 632,695 votes withheld.

Earlier this year, Whitbread announced plans to demerge Costa and list it as a separate entity.

But in August Whitbread announced the sale of Costa to Coca-Cola, claiming it was “in the best interest of shareholders”.

Whitbread said at the time the sale price represented a multiple of 16.4 times Costa FY18 Ebitda and recognised the “strategic value of Costa’s brand strength, multi-channel presence and international growth potential”.

The price was a “substantial premium to the value that would have been created through the previously announced demerger given the Coca-Cola system’s global product, distribution and vending platform”.

Proceeds of the deal will be used to pay down debt and boost the pension fund. Whitbread also intends to return a significant majority of net cash proceeds to shareholders and turn its attention to its Premier Inn hotels business. Whitbread acquired Costa in 1995 for £19m from founders Sergio and Bruno Costa when it had only 39 shops.

It now has more than 2,400 outlets and is embarking on overseas expansion.

Article credit: Propel info