Shares in Whitbread rose 7.6% after an activist investor took a stake in the company, prompting speculation about a break-up of the group.

The Times reports that US hedge fund Sachem Head yesterday acquired a 3.4% stake in the Costa Coffee operator.

The group, which has $4bn of assets under management, was founded in 2013 by Scott Ferguson after he left Pershing Square Capital Management.

There has long been speculation that Whitbread could seek to sell off parts of its business, with Costa, Premier Inn and its Beefeater or Brewrs Fayre estates all mooted as possible sale targets at one time or another.

Morgan Stanley noted recently that Whitbread’s share price was trading well below its sum-of-the-parts valuation of £45 a share (currently at c£40), while Stiffel’s figure was as high as £51 a share.

Both Sachem Head and Whitbread declined to comment to The Times.