Whitbread is laying the groundwork for a sale of a part of its £700m pub and restaurant arm in a transfer that would place its Beefeater steakhouse chain on the chopping block.
The FTSE 100 hospitality big is known to have employed advisers to discover choices for the division, which additionally homes the Brewers Fayre pub chain, amid issues that poor food and drinks gross sales are weighing on the broader enterprise.
The transfer marks the most recent chapter within the sell-off of the one-time brewer as bosses deal with repeating the UK success of its flagship resort chain Premier Inn, in Germany.
Sources stated that discussions are at a preliminary stage and should not outcome within the enterprise being offloaded. They insisted that solely a “small half” of Whitbread’s food and drinks operations was into account.
It follows a warning in Whitbread’s just lately printed annual report of “the growing divergence of efficiency of the resort enterprise and the meals and beverage enterprise”.
This might have a detrimental impact on the premium charged by Premier Inn for rooms in contrast with its rivals, Whitbread stated.
Whitbread’s lodging group gross sales grew by 27pc within the 12 months to March in contrast with a 12 months earlier, whereas meals and beverage gross sales by 4pc.
“The anticipated bounce again following the removing of buying and selling restrictions final 12 months has not materialised absolutely,” the corporate stated in its annual report.
Beefeater is the oldest model owned by the FTSE 100 firm after being arrange by the then Whitbread Brewery nearly half a century in the past. It’s one in all Whitbread’s two largest meals and beverage companies alongside 161-site pub chain Brewers Fayre.
Whitbread’s advisers are understood to have begun contacting probably events, asking them to signal non-disclosure agreements forward of a proper gross sales course of.
A lot of Whitbread’s pubs and eating places function underneath a “co-lo” association subsequent to or a part of Premier Inn accommodations, usually serving breakfast on behalf of its sister firm.
Bankers are understood to have championed the chain’s freehold properties in opposition to which financial institution financing may very well be secured.
The gross sales course of is at an early stage and Whitbread’s advisers haven’t guided events on the valuation of the enterprise, sources stated.
Whitbread doesn’t break down the monetary efficiency of its particular person eating places. UK and Eire meals and beverage annual gross sales have been £712.7m.
The choice to dump the enterprise is the primary main transfer since Whitbread offered Costa Espresso to Coca-Cola for £3.9bn in 2018.
Whitbread’s historical past could be traced again to 1742 when Samuel Whitbread went into partnership with Godfrey and Thomas Shewell.
Whitbread remained a brewer till 1974 when its first Beefeater Steakhouse was opened. In 1987 the corporate ventured into accommodations with Journey Inn, which might ultimately turn out to be Premier Inn.
Whitbread declined to remark.
