Whitbread (WTB.L), a British owner of hotels and restaurants, said on Friday it plans to return up to 2 billion pounds ($2.52 billion) to shareholders by way of a tender, as the second phase of a potential three-part capital allocation program.
In February, the group had announced a plan to return to shareholders at least 2.5 billion pounds of the net cash proceeds from the sale of its Costa coffee chain to Atlanta-based Coca-Cola (KO) for an enterprise value of 3.9 billion pounds.
The first leg of the three-phase program has been completed, with about 480 million pounds returned via a share buyback program that ended May 10, the Bedfordshire-based owner of the Premier Inn hotel chain and Beefeater restaurants said.
“The board has decided that the appropriate second phase is to conduct a tender offer to return a maximum of 2 billion pounds,” the company said in a statement. “This phase is designed to balance efficiency with recognizing the interests of continuing versus existing shareholders, rather than being designed solely to maximize the amount returned.”
The company said shareholders might decide not to participate fully or partially in the tender for a number of reasons, including their view of the potential for the value of the shares to increase in the future. The offer will be open on June 20 to July 19, subject to shareholder approvals.
“If less than 2 billion pounds is returned through the offer, the board will consider a possible third phase to return any remaining surplus cash,” the group added in the statement.