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Whitbread to Set Costa Coffee Free to Take On Starbucks

  • Costa Coffee could be valued at $3.3 billion, analysts say
  • Move follows pressure from activists Elliott and Sachem Head
Operations At A Whitbread Plc Hotel And Restaurant Ahead Of Quarterly Results
Photographer: Chris Ratcliffe/Bloomberg
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Whitbread Plc is betting that its faster-growing Costa Coffee chain will compete more effectively against the likes of Starbucks Corp. once separated from the company’s hotel business.

Costa will be spun off from Premier Inn within 24 months, the Dunstable, England-based company said Wednesday. The planned split follows mounting pressure from activist investors who said the two businesses sit uneasily together under one corporate roof.