Whitbread today (Thursday) announced that it is to sell all its 3,000 UK pubs and bars and focus on its core hotels, restaurant and leisure divisions. Shares in company leapt 8% on the news.
The group, which expects to receive around £2.5bn from the sale, will now concentrate on what it is calling "Future Whitbread", which will involve developing its Marriott and Travel Inn hotels, its restaurants, principally the Brewers Fayre and Beefeater brands, and its David Lloyd Leisure business.
Whitbread expects to complete the pubs division sale by mid-2001. Chief executive David Thomas said it could sell the division, which includes both managed and leased estates, in total, or in one, two or more parts - no decision had yet been made.
The company added that it would return around 75% of the net proceeds to shareholders, and will use the remainder to repay existing Whitbread debt".
New chairman Sir John Banham said, "This is a radical plan to focus Whitbread, generate fast earnings growth and improve shareholder returns. The restructuring creates the opportunity and the momentum to manage Whitbread's brands and property assets more aggressively and to take full advantage of Whitbread's leading positions in growth segments of the UK leisure market.
David Thomas said, "We aim to get the best price for what is a great business.
It has some tremendous brands û for example, Hogsheads is the envy of many of our competitors. It is a very desirable package."
But he added: "We want to take our time and be flexible in the way we part with the business and put it under new ownership, and that can take many forms."
But he said a management buy-out was "not on the cards at all", adding that potential buyers that had expressed interest in part or whole of the business already ran "well into double figures" and included a number of private equity and trade players.
Banham said the pubs and bars division would report more than £100m EBITDA for the half year and will have no debt.
Earlier this week Whitbread raised over £112m through the sale of its half of the First Quench off licence chain. It is now expected to be a front runner in the bidding for Granada' Forte hotel business.
Whitbread's decision to quit pubs follows similar moves by its two main rivals Bass and Whitbread. Bass has already put up to 1,000 unbranded pubs on the market, while Scottish & Newcastle also announced this week that it would be disposing of more pubs to concentrate on restaurants, lodges and bigger pubs and bars, alongside its growing international beer business.
Published on-line 10.15 am, 19/1/00
The group, which expects to receive around £2.5bn from the sale, will now concentrate on what it is calling "Future Whitbread", which will involve developing its Marriott and Travel Inn hotels, its restaurants, principally the Brewers Fayre and Beefeater brands, and its David Lloyd Leisure business.
Whitbread expects to complete the pubs division sale by mid-2001. Chief executive David Thomas said it could sell the division, which includes both managed and leased estates, in total, or in one, two or more parts - no decision had yet been made.
The company added that it would return around 75% of the net proceeds to shareholders, and will use the remainder to repay existing Whitbread debt".
New chairman Sir John Banham said, "This is a radical plan to focus Whitbread, generate fast earnings growth and improve shareholder returns. The restructuring creates the opportunity and the momentum to manage Whitbread's brands and property assets more aggressively and to take full advantage of Whitbread's leading positions in growth segments of the UK leisure market.
David Thomas said, "We aim to get the best price for what is a great business.
It has some tremendous brands û for example, Hogsheads is the envy of many of our competitors. It is a very desirable package."
But he added: "We want to take our time and be flexible in the way we part with the business and put it under new ownership, and that can take many forms."
But he said a management buy-out was "not on the cards at all", adding that potential buyers that had expressed interest in part or whole of the business already ran "well into double figures" and included a number of private equity and trade players.
Banham said the pubs and bars division would report more than £100m EBITDA for the half year and will have no debt.
Earlier this week Whitbread raised over £112m through the sale of its half of the First Quench off licence chain. It is now expected to be a front runner in the bidding for Granada' Forte hotel business.
Whitbread's decision to quit pubs follows similar moves by its two main rivals Bass and Whitbread. Bass has already put up to 1,000 unbranded pubs on the market, while Scottish & Newcastle also announced this week that it would be disposing of more pubs to concentrate on restaurants, lodges and bigger pubs and bars, alongside its growing international beer business.
Published on-line 10.15 am, 19/1/00
