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Last Updated: Monday, 14 March, 2005, 10:35 GMT
Whitbread confirms Marriott sale
Marriott hotel
Whitbread is refocusing its hotel business
Leisure group Whitbread has confirmed it is to sell its Marriott UK hotels, a move which it says should raise more than 1bn ($1.9bn).

Whitbread will form a joint venture with Marriott International - the US owner of the brand - to hold the 46 UK hotels until they are sold.

The deal will see Whitbread receiving an initial payment of 710m in May.

Of this sum, 400m will be returned to shareholders and 100m will go towards cutting the company's pension deficit.

The rest of the money will be used to cut debt.

Fresh focus

Today's announcement substantially completes the reshaping of Whitbread for the future
Alan Parker, Whitbread chief executive

Under the terms of the agreement, the hotels will be operated by Marriott International under long-term management contracts which will continue after the hotels are sold.

Whitbread said the joint venture was looking to sell the properties within two years.

On Friday, Whitbread's shares jumped after it confirmed it was in talks to sell its franchised Marriott business. The move is part of the company's move to focus on the budget end of the hotel sector.

Last year, the firm bought the Premier Lodge budget hotel chain for 505m in order to integrate it with its Travel Inn business to create Premier Travel Inn.

"Today's announcement substantially completes the reshaping of Whitbread for the future," said Whitbread chief executive Alan Parker.

"We expect this transaction to realise at least 1bn over the next two years from a franchised business that, despite good management and operational performance, does not meet the group's cost of capital requirements."

As well as hotels, Whitbread also owns Beefeater and TGI Friday restaurants, Costa Coffee shops and David Lloyd Leisure.

The Whitbread announcement came as rival budget hotel operator Travelodge said it planned to double in size by 2011 to take advantage of growth in the sector.


SEE ALSO:
Whitbread in Marriott sale talks
11 Mar 05 |  Business
Whitbread upbeat as profits rise
05 May 04 |  Business


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