Spirit sells Premier Lodge to Whitbread

Spirit Group has agreed the sale of the Premier Lodge budget hotel business to Whitbread.

The £536.2m deal includes £505m for 141 hotels, which will be combined with Whitbread's Travel Inn operation. Whitbread is also paying £31.2mn for 19 pub restaurants located on Premier Lodge sites, which will be re-branded as Brewers Fayre outlets.

Spirit picked up Premier Lodge as part of last year's £2.5bn acquisition of the the Scottish & Newcastle Retail business, which brought its pub and bar estate to 2,400 pubs.

Spirit chief executive Karen Jones said: "We are delighted to have agreed the sale of Premier Lodge. It's a great business and I would like to thank the whole Premier Lodge team for their professionalism and dedication to customers during this period.

"We look forward to working with both the Premier Lodge and Whitbread teams in continuing to build our respective businesses through close co-operation and a dedication to our customers.

"The team at Spirit is now focused on continued growth and improving our existing position as the UK's number one managed pub retailer."

Whitbread is creating a new brand, Premier Travel Inn, which will become the biggest budget hotel business in the UK with 29,141 rooms in 461 locations.

The Brewers Fayre chain will increase to 267 outlets once the newly-acquired pubs are rebranded, consolidating its status as the UK's largest pub restaurant brand.