Whitbread could be a target for US hotel group
Premier Travel Inn and Pizza Hut owner Whitbread was today reported to be in the sights of US hotel and property business Starwood Capital.
An approach for Whitbread, which also owns David Lloyd Leisure and TGI Friday’s, would need to be in the region of £3bn (€4.4bn).
The Mail on Sunday said Starwood was understood to be working through its options with investment bank JP Morgan. It has around 950 hotels worldwide with ownership of brands such as Sheraton, Westin, St. Regis, Luxury Collection, Four Points and W Hotels.
It missed out on the De Vere Group earlier this month after property tycoon Richard Balfour-Lynn’s Alternative Hotel Group won the auction with an offer worth £767m (€1.1bn).
Whitbread is no stranger to takeover speculation amid reports last year that private-equity firms were interested in breaking up the group.
Analyst Richard Carter at stockbroker Numis told the newspaper that an approach from Starwood made sense.
He added: “Whitbread’s businesses are worth far more individually than the current sum of the parts.
“It would make sense for Starwood to go for Whitbread. It wants to get into the UK market and Premier Travel Inn gives it the premium UK brand in budget hotels.”
Speculation that Whitbread may sell off TGI Friday’s and Pizza Hut could make Whitbread even more attractive to a property fund, the report added.
The UK group announced on Friday it had sold 239 Brewers Fayre and Beefeater restaurants to Harvester owner Mitchells & Butlers. It still has around 350 outlets under the two brands, most of which are located adjacent to its Premier Travel Inn operation.
Premier is the fastest growing part of Whitbread following a like-for-like sales rise of 7% last year, while its contribution to operating profits increased by 30.4% to £139.8m (€204.9m).
