Under the terms of the deal, German hotel and restaurants willbe put up for sale, along with up to 50 pub restaurants. The saleof the Courtyard hotel business is already under way and thecompany hopes to raise euro 71.9 million ($91.5 million) fromthat.

"Whitbread will have a new approach to growth, a greater focuson return on capital and a clear commitment to returning surpluscash to our shareholders," says chief executive Alan Parker. "Thedisposal of these non-core or low returning assets will create anew, more effective business for delivering higher returns and aWhitbread focused on growth."

At the same time, Whitbread unveiled a 9.4% rise in interimpretax profit before exceptionals, to euro 212 million ($269million). Company spokespeople say that, although forecasts for theUK economy are mixed, the board is confident about Whitbread'sprospects. CEO Parker states that the four-star hotel market isimproving and its budget hotel brand Premier Travel Inn isperforming "stunningly well."