Whitbread has sold on both the Otterspool and Britannia pubs to Mitchells and Butlers.

Mitchells & Butlers plc to acquire 44 pub restaurants from Whitbread PLC in exchange for 21 Express by Holiday Inn Lodges

Following Mitchells & Butlers’ stated intention to create additional value from its non-core assets, a swap of lodge assets for pub restaurants has now been agreed with Whitbread.
Under the terms of the agreement, Whitbread will acquire 21 of Mitchells & Butlers’ lodge sites (1245 rooms), currently trading under the Express by Holiday Inn brand, in exchange for 44 standalone Whitbread pub restaurant sites, currently trading under the Brewers Fayre and Beefeater brands. The exchange has been made on the basis of equivalent EBITDA of circa £9m from both the hotels and the pub restaurants and a valuation of circa £78m for both sets of assets to be exchanged.
These high quality pub restaurant sites will be converted to Mitchells & Butlers’ industry leading brands and formats with significant sales and profits uplifts expected. The transaction is expected to complete on 19 September 2008. In order to assist in funding the capital expenditure required for the conversions and to further reduce group debt levels, we intend to review opportunities for sale and leaseback financing on these acquired freehold sites. This would demonstrate the value of the properties acquired, in addition to the value that will be created from the operational profit uplifts generated by the brand conversions.
We will also continue to actively pursue the creation of additional value from our other non-core assets, including the Innkeeper’s Lodge units.
Commenting on the deal, Tim Clarke, Chief Executive of Mitchells & Butlers, noted:
“This deal drives further consolidation in top end managed houses and demonstrates our ability to create value from the non-core assets. Our brands can add a lot of value to these pub restaurant sites as we have shown with previous acquisitions.”

Taken from the M & B website

and the Whitbread view on the same deal…

Whitbread PLC to acquire 21 Express by Holiday Inn hotels from Mitchells & Butlers plc in exchange for 44 Whitbread Pub Restaurants

31/07/2008
Whitbread PLC (“Whitbread”) today announces that it has agreed to acquire 21 hotels (1245 rooms), currently operating as Express by Holiday Inn hotels from Mitchells & Butlers plc (“MAB”), in exchange for 44 Whitbread pub restaurants.
The exchange has been made on the basis of equivalent EBITDA of around £9m from the hotels and pub restaurants and an estimated value of £78 million for the assets to be exchanged. This transaction is expected to be earnings neutral in 2009/10 and thereafter earnings enhancing.
The exchange will take the total number of UK Premier Inn rooms to over 38,000 in 550 hotels. Planning consent has been granted to extend five of the 21 acquired hotels, adding around 200 new rooms. Whitbread has identified additional opportunities to extend the acquired estate to over 1500 rooms, subject to planning approvals. This represents a significant contribution towards the 2008/09 target of 4,000 new Premier Inn rooms.
The hotels are modern, in prime locations throughout the UK and will be fully integrated into the Premier Inn estate on completion. The 400 existing employees at the hotels will transfer to Whitbread and approximately 1300 pub restaurant employees will transfer to MAB on completion, due on 19th September 2008.
The 44 Whitbread pub restaurants to be exchanged are on sites where development with a Premier Inn has not been possible due to planning constraints. Whitbread will continue with plans to develop a Premier Inn on its remaining 51 pub restaurant sites where there is currently not yet a hotel alongside.
Alan Parker, Chief Executive Officer commented:
“There is a clear and compelling logic to this transaction. Acquiring this well located, modern hotel estate will enable us to re-brand quickly, drive occupancy, increase profits and extend the number of rooms at these hotels by at least 20%.
“We are exchanging these pub restaurant sites because we have been unable to develop a Premier Inn alongside, which was the reason for retaining them”.

taken from the Whitbread website