Canaccord buys into Whitbread demerger plans

Indeed, if management at either slipped-up, there would be plenty of suitors about to prop-up the two companies' shares, they said.

"We already expect the management teams of IHG, Marriott, and Accor to be doing their homework," they added, saying they remained 'buyers' of the shares.

Despite the funding shortfall in Costa's pensions, they also believed a de-merger was possible in less than the two year timeline outlined by the company.

Until a de-merger was concluded, the Canadian broker said, Whitbread had the "opportunity to turn interesting international bridgeheads into material growth opportunities for both Premier Inn and Costa," in reference to Germany and China, respectively.

Back on the subject of the company's pension liability, Canaccord pointed to the £4bn-plus of freehold asset on the balance sheet - mostly at Premier Inn - and its low net debt-to-EBITDA ratio of 1.1 as reasons why it would expect the pension liability and the majority of the debt to be retained in Premier Inn.

Canaccord kept its target price for the shares at 4,500p but mooted a potential break-up price of 5,200p.