Activist investor Corvex calls for strategic review at Premier Inn-owner Whitbread

Dec 18 (Reuters) - Corvex Management urged Premier Inn owner Whitbread WTB.L to review its strategy and 3.5-billion-pound ($4.68 billion) capital plan on Thursday, citing a gap in valuation after recent UK budget changes saddled it with more costs.

The hedge fund - founded by Keith Meister, a former protege of Carl Icahn - disclosed a 6% stake in Whitbread and said it would seek board seats to push Britain's largest hotel operator to evaluate a "full range of options" with independent advisors.

Whitbread shares rose 5.5% to 2,579 pence by 1110 GMT. They have fallen about 12% so far this year, valuing it at about 4.15 billion pounds.

"Whitbread has a clear strategy and business model," Whitbread said in an emailed statement to Reuters.

WHITBREAD FACING HIGHER COSTS FOLLOWING UK BUDGET

U.S.-based Corvex is now Whitbread's second-largest shareholder, just behind private equity giant BlackRock BLK.N, according to LSEG data.

"We believe the company must evaluate all available strategic options with the objective of maximising value for all shareholders," it said, pointing out that Whitbread's investment size was now approaching its market capitalisation.

The fund also said Whitbread's current share price appeared to assign no value to several components of the business, including its UK leasehold portfolio, German hotel assets and properties under construction.

"Our five-year plan is designed to deliver strong returns for shareholders through growth in both the UK and Germany," Whitbread said in response.

The group, which has over 840 hotel sites in the UK, warned last month that new budget measures would add 40 million to 50 million pounds in costs next fiscal year, dealing what one Bernstein analyst called a "hammer blow" to its plan to boost margins and profits.

Whitbread had said it would explore options to offset the hit from the budget, in which taxes on high-value commercial properties were raised.

The hospitality industry was already under pressure due to labour shortages and higher costs in the wake of the pandemic.

($1 = 0.7483 pounds)