Parker unloads some Marriotts to fund £500m Whitbread bonanza

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The Independent Online

The new Whitbread boss, Alan Parker, is expected to deliver a £500m bonanza for shareholders this week by revealing plans to sell off a chunk of the leisure group's Marriott hotel estate.

Mr Parker, who took over as chief executive in June, has carried out a group-wide review and will unveil his findings, along with the interim numbers, on Thursday.

It is expected to centre on a sale and manage back of the Marriott estate, where Whitbread sells the property but continues to run the hotels.

The portfolio is worth around £1.1bn. But it is understood that Mr Parker has decided against selling the entire estate, opting instead to offload around 20 per cent initially. That is expected to unlock between £250m and £300m, which will be returned to shareholders.

Whitbread, which also owns Costa Coffee, TGI Fridays and the David Lloyd leisure centre chain, is already selling the Marriott Courtyard chain as it wants to quit the three-star market. That is likely to raise around £80m. Further cash will then be raised once Britannia Soft Drinks, the owner of Britvic, is floated.

The shareholders have until 2008 to float the business but most expect it will be listed next year. Whitbread and Allied Domecq both own 23.75 per cent, while InterContinental Hotels holds 47.5 per cent. Whitbread's share has been valued at around £200m, meaning the total amount of cash returned to investors over the coming months could exceed £500m.

The City is divided as to what it wants from Mr Parker's review. Some analysts are concerned that Whitbread's shares could take a hit if it is not far reaching enough.

Others, however, want Mr Parker to focus on trading rather than a major overhaul.

Mark Reed of brokers Teather & Greenwood said: "Trading is pretty difficult and he should be focusing on battening down the hatches for a tough winter rather than unveiling some grand scheme."