Development

Permira checks out of Travelodge with £1bn sale

Permira, the private equity group, is putting the budget hotel group Travelodge up for sale with a price tag of around £1bn as it looks for a timely exit from its three-year investment.

Travelodge UK Last week Permira held a beauty parade of potential advisers to arrange a sale or flotation of the business. A sale is thought to be the most likely scenario, easily the "cleanest exit" for a private-equity business, and also because the budget hotel chain is expected to attract a lot of bid interest. A float, which carries more risk, is seen as the least likely option. A management buyout is seen as a possibility.

If Permira decides to go for a sale, Whitbread, the leisure group that owns the larger rival Premier Travel Inn chain, is expected to throw its hat in the ring. Whitbread is understood to have already started work on a possible bid to take out its aggressive rival. Travelodge recently declared a price war on Premier Travel and aims to expand its 17,000 rooms, across 291 hotels, to 30,000 in the next three years. That compares with Whitbread's plans to increase Premier Travel's 30,000 rooms to 45,000 by 2011.

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Source - The Independent



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