Travelodge rallied its defences publicly for the first time this week following increasing speculation that rival Whitbread was preparing a £1b takeover bid.

The budget hotel chain released a statement yesterday saying: "It is the firm view of the management that [a takeover by Whitbread] would be detrimental to the development of Travelodge."

A spokesman added: "The management team would prefer a management buyout, although flotation remains a possibility."

Whitbread, which owns rival budget hotel chain Premier Travel Inn, declined to comment on the rumours, or on reports it had contacted the Office of Fair Trading over competition regulations. Travelodge's owner, private equity group Permira, is expected to put the hotel group up for sale in the near future.

By Emily Manson

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