Whitbread ponders a swoop on Pelican
Tuesday 30 July 1996
Shares in Whitbread firmed 2p to close at 689p yesterday, after the brewing and leisure group said it would be making an announcement today but declined to give any further details. It denied that the proposed deal was related directly to talks between Bass and Allied Domecq which were finally confirmed after weeks of speculation.
Reporting an 11 per cent rise in pre-tax profits to pounds 283m in May, Sir Michael Angus, chairman of Whitbread, said the company was well placed to fund further expansion this year with debt of only pounds 500m, representing gearing of a modest 22 per cent.
Whitbread spends heavily on its core retail chains, but has also looked outside the group for growth. In the last year it spent pounds 380m on two sizeable deals - the purchase of 16 Marriott hotels in the UK and David Lloyd Leisure, the sports club chain set up by the former tennis star.
It is understood that Whitbread may be preparing another package of deals and sources believe the Pelican acquisition may not be the only deal in the pipeline.
Recent retail acquisitions have included the Costa Coffee chain of coffee shops. Whitbread was also prepared to have spent more than pounds 1bn on a chain of mid-market hotels and eateries during the Granada bid for Forte at the end of last year.
Pelican, which has grown in six years from nothing to a chain of 100 concept bar/restaurants including the Cafe Rouge and Dome brands, would fit well with Whitbread. which already owns the TGI Fridays American bars, Pizza Hut and Beefeater pubs.
The group is at the forefront of the UK restaurant boom, with an expansion policy including 37 openings in 1995 and 1996 and the first big push out of London. A further 22 sites are earmarked for this year.
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