Costa Coffee, the world's second-biggest coffee shop chain, should remain part of Whitbread Plc to maximise opportunities for international expansion, its Managing Director John Derkach told Reuters on Friday. Analysts have speculated that Costa could be spun out of Whitbread to realise value for shareholders, as it has few synergies with Premier Inn, the budget hotel chain that constitutes the group's other major business.
Costa could be worth over 1 billion pounds ($1.6 billion) as a standalone business. However, in an interview at Costa Coffee's roastery in Lambeth, south London, Derkach said such a move would be "bonkers" and the business needs the access to capital that being part of FTSE 100-listed Whitbread offers.
Costa is planning to expand to 3,500 shops world-wide by 2016 from around 2,100 at present. It is in 25 countries outside Britain, with its biggest non-UK presence in China, Poland, India and the United Arab Emirates. It had just 40 shops when it was acquired by Whitbread. Costa Coffee was founded by Italian brothers Sergio and Bruno Costa, who opened a single cafe in Vauxhall, south London in 1971.