BIRMINGHAM, ENGLAND Mitchells & Butlers PLC has sold the bulk of its hotels business to property investment group Prupim, which is in turn leasing the hotels to UK budget chain Travelodge.
Some 52 properties comprising about 2,000 guestrooms, most of them part of the Innkeepers Lodge brand, will now be operated and rebranded by Travelodge under a 25-year agreement with Prupim, a subsidiary of Prudential PLC. The transaction, which includes the leaseback of eight pubs within the sold properties, totals £91 million. The deal is expected to close next month.
M&B To Focus On Pubs
Mitchells & Butlers will now focus primarily on its pubs and catering businesses. It will continue to operate about 750 guestrooms across 46 properties, mainly inns above restaurants that will continue as Innkeeper’s Lodges. “This transaction is in line with our strategy of disposing of the non-core assets and focusing the business on expanding the number of sites of our market leading restaurant and pub brands which have significant growth potential,” says Mitchells & Butlers CEO Adam Fowle.
Travelodge now operates 452 hotels comprising 30,504 guestrooms, the vast majority of which are in the UK. Travelodge plans targets a portfolio of 70,000 guestrooms and 1,000 hotels by 2020.