Whitbread set to offer pounds 550m for Swallow's hotel chain
Monday 22 November 1999
Speculation that the two companies were in advanced negotiations began on Friday following a last-minute surge in Swallow's shares, which shot up more than 10 per cent to close 30p higher at 307.5p. It is understood that the financial advisers to the two companies spent much of the weekend in discussions and that Whitbread was yesterday preparing to offer about pounds 550m, or 375p a share for Swallow, a 35 per cent premium to Friday's closing price.
If the deal goes ahead, it is likely that Whitbread would merge the 38, mostly four-star, Swallow hotels with its own UK Marriott chain. The two groups are thought to have held talks a year ago on a possible tie-up which foundered over price.
Analysts said Whitbread is badly in need of a deal of this scale after it lost out to Punch Taverns to buy Allied Domecq's retail unit. Its failure made Whitbread the subject of takeover speculation, both as a target and a buyer.
Swallow has long been seen as a bid target, but attention has been focussed on a merger with Greenalls, the leisure group that recently sold its pub chain to Scottish & Newcastle. Greenalls is reported to have held informal talks with Swallow over a possible pounds 1bn merger of their hotel businesses. It has also been suggested that Whitbread could bid for Greenalls.
Whitbread manages 36 Marriott hotels in Britain, including 10 hotel and country clubs, which would fit neatly with Swallow's hotels, which are mainly in town centres.
Swallow also has a small chain of managed pubs. The company, which is based in the North-east of England, closed its two breweries in Sunderland and Sheffield this summer and then sold off most of its tenanted pubs.
Aside from pubs and hotels, Whitbread has the UK licences for Pizza Hut and TGI Friday's, and owns the David Lloyd Leisure fitness club chain. The company spent pounds 194m during the first half of this year to expand its leisure, budget hotel and coffee businesses and expects to spend about the same on expansion plans during the second half.
Announcing the group's first half results in October, David Thomas, Whitbread's chief executive, said: "We are gearing up for growth."
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 There is literally not a single woman in this iPhone 6 queue
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...