Whitbread saw a surge in its share price this week after rumours that Starwood Capital was preparing a bid for the group.
As has been the case for more than a year, there is more speculation than substance to the current bid news but it provides yet another reminder for CEO Alan Parker that his job his far from done.
The Financial Mail on Sunday ran with the Starwood piece and the article is thought to have been the main motivator for a more than 6% rise in Whitbread's share price on Monday. The price was up again yesterday, albeit only 2.5%.
The piece suggested that Starwood Capital is in talks with its advisers about launching a £3bn bid for Whitbread. Perhaps it might have been more newsworthy to report on a major private equity firm that has not yet been in talks about bidding for Whitbread.
Whatever the likelihood of something forthcoming – and it seems more probable than not that somebody will launch an attempt – it highlights the need for Whitbread to continue its moves to unwind its conglomerate structure.
Last week, Whitbread announced the £497m sale of its standalone pub restaurant division to rival pub operator Mitchells & Butlers. This deal was struck at a healthy 10 to 11 times current year EBITDA for the 239 units, proving that even if Whitbread has come unstuck buying assets (notably the Pelican Group), it is adept at selling them.
Whitbread announced with the pub restaurant sale that it was to add around 3,000 new rooms to its retained pub restaurants, although it has yet to unveil the prototype for its small-format of the Premier Travel Inn chain.
Despite running what is now the UK's biggest hotel brand and shedding much of its other interests, Whitbread is still under pressure to bring more clarity to the business.
Some commentators had expected there to be a pause while investors digested the radical transformation of the group so far but such luxury does not seem to be likely.
About to go in for surgery are Whitbread's stake in the Pizza Hut joint venture, worth just under £300m, and the TGI Friday's franchise, which is worth just over £100m. Both look set for amputation.
Still deemed healthy are the underperforming David Lloyd Leisure fitness club division, worth perhaps £600m, and the more impressive Costa Coffee chain worth somewhere north of £500m. Parker may yet have to call one or both of these in for surgery if he is to see-off the private equity bidders.
Even if both go, this may not be the end of the problem. Whitbread has to demonstrate that it can deliver longer term growth potential from the PTI brand. It would certainly buy time if it could acquire Travelodge at what the market deemed was a reasonable price but only a major move overseas will deliver what it needs over a longer time frame.
There is currently some talk in the Whitbread camp about just such a foray overseas. When it comes, it needs to be of a bigger scale than the deal with Emirates that will see PTI go to the Gulf region.
There is nothing wrong with this deal as such, it is just that it hardly moves the needle as far as PTI's overall growth rate is concerned.
Ultimately, some form of prop-co op-co structure is what is most likely to get the private equity firms off Parker's back. Without the underpinning of the real estate within both PTI and adjacent restaurants, any takeover looks much riskier.
And if the split is done right – on sensible, sustainable yields – then it might prove a benefit to the business itself by providing clarity and focus. Which is what the ending of the conglomerate structure was – at least in theory – all about in the first place.