Leisure giant Whitbread has quit the luxury hotels business with the sale of its Marriott hotels in a deal worth almost £1bn.
The 46 hotels - part of a joint venture set up with Marriott International last year - have been sold to Royal Bank for Scotland for £951.4m ($1.7bn).
Whitbread will receive £237m for its share of the sale.
The deal will allow Whitbread to pay an extra £400m to investors, on top of a £400m special dividend agreed in 2005.
Whitbread had long been expected to quit the four-star hotels business to concentrate on its more lucrative budget hotels.
In the 50 weeks to February, like-for-like sales at the group's Premier Travel Inn business increased by almost 7%.
That was in sharp contrast to struggling sales at the firm's restaurants and pubs divisions - which include TGI Fridays and Pizza Hut - which have both been struggling in a tough market.
Shake-up
The disposal of the Marriott hotels is part of Whitbread's efforts to restructure the group.
Last year, the group said it was setting up a joint venture with Marriott International - the US owner of the brand - which would hold onto the 46 UK hotels until they were sold.
It received an initial payment of £710m under the agreement - £400m of which was earmarked to be returned to shareholders while £100m went towards cutting its pensions deficit, and the rest was used to cut its debts.
Marriott International is expected to continue to operate the hotels under an agreement with Royal Bank of Scotland. following the sale.
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