Whitbread has confirmed that it is to sell its 51-strong chain of four-star Marriott hotels, a move that is likely to raise more than £1bn for the company.
Whitbread will form a joint venture with the US owner of the brand – Marriott International – as a holding company for the hotels until they are sold.
Under the terms of the agreement, Whitbread will receive an initial payment of £710m from the joint venture on 5 May. Some £400m of that sum will be returned to shareholders, £100m will go towards cutting the company’s pension deficit, and the remainder will be used to pay down debt.
Marriott International will continue to operate the hotels, under both the joint venture and following the sale of the properties.
The move to sell the hotels follows on from Whitbread’s disposal of its three-star Courtyard by Marriott business to property investment firm Chiltern Mondiale for £79m in November 2004, and its £505m purchase of the Premier Lodge budget hotel chain last year.
References: EGi News 14/03/05
