Whitbread already has 3,900 pubs, but under restrictions imposed by the Beer Orders, it can expand to a maximum of 4,312. The brewing and leisure giant's likely targets include Surrey Free Inns, operator of the Litten Tree brand of pubs, which offer long opening hours and a changing menu to customers throughout the day.
Other candidates include the Old English Pub Company, which has been successful with country pubs and inns with hotel rooms, and Yates Brothers, which specialises in large, brash town-centre pubs aimed at younger drinkers.
According to sources, Whitbread is seeking a "female-friendly" group of pubs with a significant food offer.
Whitbread looked at Regent Inns in the summer when the company's shares almost halved after a calamitous profits warning, but decided not to proceed. With consumer spending weakening, Whitbread feels that some share prices in the pub and restaurant sector may continue to fall. This is likely to push a deal into next year.
Whitbread painted a gloomy picture of the pub market last month when it reported its half-year results. Like-for-like sales in the Whitbread Inns division fell by 3.4 per cent. Sales at the Beefeater restaurants were down by more than 4 per cent on a like-for-like basis.
Whitbread is currently testing a new style of Beefeater in the Midlands which concentrates on "the best of British" in its food offering. The menu focuses on traditional British meals served at value prices.
Whitbread already operates several brands within its inns division. These include the Brewers' Fayre pub and restaurant concept, Wayside Inns country pubs and the Hogshead group of more traditional boozers.Reuse content