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LONDON-Hotel and pub group Whitbread is putting assets valued at euro 1.2 billion ($1.5 billion) up for sale. Half of the receipts will be returned to shareholders and the remainder will be used to reduce its pension fund deficit and cut its debt. Plans include a sale/manage-back program at its Marriott hotels. An initial 12 properties will be sold in 2005 and 2006 and the rest the year after.

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

“Whitbread will have a new approach to growth, a greater focus on return on capital and a clear commitment to returning surplus cash to our shareholders,” says chief executive Alan Parker. “The disposal of these non-core or low returning assets will create a new, more effective business for delivering higher returns and a Whitbread focused on growth.”

At the same time, Whitbread unveiled a 9.4% rise in interim pretax profit before exceptionals, to euro 212 million ($269 million). Company spokespeople say that, although forecasts for the UK economy are mixed, the board is confident about Whitbread’s prospects. CEO Parker states that the four-star hotel market is improving and its budget hotel brand Premier Travel Inn is performing “stunningly well.”

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