Mitchells & Butlers has announced plans to swap 21 Express by Holiday Inn Lodges for 44 pub restaurants owned by Whitbread. Under the terms of the agreement, Whitbread gets 1245 extra rooms and M&B gets pubs which are currently trading as Brewers Fayre and Beefeaters. In statements this morning the two companies said the deal had been done on the basis that both sets of assets produced underlying earnings of £9m and were worth £78m. M&B said that to fund the capital expenditure required for the conversions and to further reduce debt levels it would look for sale and leaseback funding on the acquired freehold sites. Whitbread added the exchange would take the number of Premier Inn rooms to more than 38,000 in 550 hotels. It also said that planning permission had been granted to extend five of the 21 newly acquired hotels and the Whitbread pub restaurants had been exchanged on sites where a Premier Inn had not been viable. Tim Clarke, chief executive of M&B, said: "This deal drives further consolidation in top end managed houses and demonstrates our ability to create value from the non-core assets. “Our brands can add a lot of value to these pub restaurant sites as we have shown with previous acquisitions." Alan Parker, chief executive officer of Whitbread, added: “There is a clear and compelling logic to this transaction. Acquiring this well located, modern hotel estate will enable us to re-brand quickly, drive occupancy, increase profits and extend the number of rooms at these hotels by at least 20%. "We are exchanging these pub restaurant sites because we have been unable to develop a Premier Inn alongside, which was the reason for retaining them" M&B previously acquired 239 pubs from Whitbread in 2006.