Whitbread £800m sell-off begins
The long expected Whitbread sale is on with more than £800m of assets earmarked for disposal by chief executive Alan Parker who has announced a far-reaching shake-up of the company's hotel, restaurant and pub portfolio.
In addition to the planned sale and lease-back of its 25 Marriott hotels, sale of its 11 three star Courtyard hotels, disposal of its 65 restaurants in Germany and capitalisation of a 23 per cent stake in Britvic, due for floatation next year. The former brewer is also severing its 250-year historic tie with the City of London by putting its HQ at the former brewery on Chiswell Street up for sale.
The Marriott hotels are expected to raise £500m, while the Britvic stocks should bring in up to £200m and the German assets could fetch another £30m. The site of the former Chiswell brewery is hoped to raise a further £20m.
Meanwhile, Whitbread is to trim its portfolio restaurant and pub of poor performers, hoping to realise a further £50m with the sale of 50 underperforming outlets. The Brewsters pub-restaurant chain is to be incorporated into Brewers Fayre and the Out and Out chain merged into Beefeater. The recently purchased Premier Travel Lodge chain of budget road-side stops is to be expanded by 1,500 rooms to 35,000 rooms by 2008.
With the renewed focus on and expansion of the core earners of Beefeater, Brewers Fayre, David Lloyd Leisure, Costa Coffee and Pizza Hut, Whitbread also said it will create 8,000 new jobs over the next four years.
Despite the scale of the planned shake-up, City analysts gave a mixed reaction, with some saying the restructuring could have gone further. Whitbread shares also dipped 20½p to 810½p. Half of the £800m is earmarked for return to shareholders, with the rest being ploughed into the reduction of £1.4bn debt and a £376m pension deficit.
Parker announced the business review to coincide with the company's half year results which reported a pre-tax profit before exceptional charges of 147.4m, up from £134.7m in the previous year.
