Premier Travel Inn owner Whitbread has agreed to sell its David Lloyd Leisure business to property company London & Regional Holdings and Bank of Scotland Corporate for £925m.
Whitbread said the cash deal represented a 13.4% multiple of the leisure club chain’s earnings before interest, tax, depreciation and amortisation in the year to 1 March 2007 of £68.8m.
The company will use the money to pay down debt and boost its Premier Travel Inn and Costa businesses.
Any excess cash, net of pension fund contributions and acquisitions, will be returned to Whitbread’s shareholders.
Alan Parker, chief executive of Whitbread, said: “Whitbread is now well placed to deliver the ambitious growth plans for its hotels, restaurants and coffee shops.”
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By Chris Druce
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