Source: Sharecast
The New York firm said it had accumulated a 6.05% holding in the London-listed hospitality business, and would now seek representation on the board.
Shares in Whitbread, which also owns restaurant brands including Beefeater and hotels in Germany, jumped on the announcement. By 1045 GMT they were trading 6% higher at 2,582p, making it the second-highest riser in the FTSE All Share.
In a statement, Corvex said it had invested 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 hotel portfolio alone.
"In light of this valuation disconnect, and following the recently announced UK Budget and change to rateable values and business rates, we believe the company should undertake a strategic review to assess it capital allocation priorities and overall strategic direction."
Last month Whitbread warned that the higher business rates announced in the Budget would cost it between £40m and £50m in the next fiscal year.
At the time, Berenberg said the rates headwinds, coupled with cost inflation in other areas and higher lease costs from ongoing sale and leasebacks, "all present challenges, which Whitbread will need to address to protect its profitability in the next few years".
Corvex wants the review to pay particular attention to the company’s current five-year £3.5bn capital plan.
"We have no predetermined any particular outcome," Corvex insisted, "and believe a rigorous and unbiased, fact-based review - aimed at delivering the most attractive long-term, risk-adjusted value for shareholders - should determine the course of action for the company."
A Whitbread spokesperson said: "Whitbread has a clear strategy and business model, and our five-year plan is designed to deliver strong returns for shareholders through growth in both the UK and Germany.
"We run our business for the long-term but remain flexible and, as stated, we are exploring various options to further drive profits, margins and returns in light of the impact of the measures in the Budget."
They declined to address Corvex’s specific requests.
