Acquisition

Whitbread PLC
23 July 2004


                   Whitbread acquires Premier Lodge for £505m
                  Also acquires 19 pub restaurants for £31.2m
                          Creates Premier Travel Inn -
                      the biggest UK budget hotel business

Whitbread PLC ('Whitbread') announces today that it has agreed to acquire the
Premier Lodge budget hotels business from The Spirit Group ('Spirit') for a
consideration of £505 million.

The acquisition includes the Premier Lodge estate of 132 hotels (comprising
9,133 rooms), and a further nine pipeline sites (929 rooms) which will be
integrated with Whitbread's existing Travel Inn business under a new brand,
Premier Travel Inn.

Premier Travel Inn will become by far the biggest budget hotel business in the
UK  with 29,141 rooms in 461 locations.

Whitbread will also acquire 19 co-located pub restaurants from Spirit for an
additional consideration of £31.2million.  These will be re-branded as Brewers
Fayre, the UK's biggest pub restaurant brand, also owned by Whitbread, by March
2005.

The consideration will be paid in cash from bank facilities.

Highlights:

  •       Builds substantially on Whitbread's leadership of the UK's fast 
          growing budget hotel sector

  •       Creates value through revenue enhancement and cost synergies unique 
          to the combined Travel Inn and Premier Lodge operation

  •       Earnings accretive to Whitbread shareholders in first full year of 
          ownership (fiscal 2005/6)

  •       Return on the total investment, including new hotels and development 
          pipeline expected to exceed 10% in the second full year. 
         (fiscal 2006/7)

Incremental profit and synergies

The businesses being acquired generated an estimated PBIT of £29m in the year to
December 31, 2003 and £16m in the half year to June 26th 2004.  (H1 2003: £12m).

Depreciation in the year to December 31st, 2003 was: c. £12m (H1 2004 £6m).

By the second full year of Whitbread's ownership, annual incremental profit from
the hotels opened in 2003 and later, together with the nine sites currently in
the process of development, is expected to be approximately £8m.  Approximately
£32m will be invested to complete the sites opening after January 1st, 2004.

Net annual synergies of £12m from revenue enhancement and cost savings across
the combined Premier Lodge / Travel Inn estate are expected by the second full
year of Whitbread's ownership.  One off costs of £8m are expected to be expensed
in Whitbread's current financial year to cover integration and refurbishment.

Whitbread's chief executive, Alan Parker, said: 'This acquisition offers an
excellent fit with our existing Travel Inn businesses and strengthens our
leadership in UK budget hotels. The acquisition represents a step-change in our
scale and presence in this attractive and growing sector.  With 461 locations
Premier Travel Inn will be the UK's most accessible hotel brand with first class
operations and systems.

'Whitbread has a proven track record in budget hotels.  In recent years we have
increased profit and achieved occupancy levels unmatched by any other major UK
hotel operator.  Following extensive due diligence, we have developed detailed
integration plans to enable us to deliver the improved profitability and
synergies which have been identified.

'Premier Lodge has high quality and well located assets which are trading
strongly with sales up 20% in the first half of 2004.  A high proportion of the
Premier Lodge estate is newly refurbished or recently built.  The 19 pub
restaurants will confirm Brewers Fayre as the largest pub restaurant brand in
the UK.

'The acquisition reinforces our intent to focus new capital on our best
performing operations and provides an excellent platform for further organic
development.'

                                     -ends-

Contacts

Whitbread PLC                            David Reed                020 7806 5436
Whitbread PLC                            Dan Waugh                 020 7806 5442
Morgan Stanley                           Brian Magnus              020 7425 9446
Tulchan  Communications                  Andrew Grant /            020 7353 4200
                                         Andrew Honnor

(pictures available to press at www.newscast.co.uk - 020 7608 1000)

A presentation for analysts will be held on Monday, July 26th, 04 at The London
Stock Exchange, (The Theatre) 10 Paternoster Square, London EC4M 7LS.
Registration from 9.00am, presentation at 9.30am.  A live webcast of the
presentation will be available on the website at : www.whitbread.co.uk   This
webcast also will be available on the site for replay from 12.00pm.
Alternatively, you can listen to the presentation by dialling: 0800 279 9640.

Notes to editors

Premier Lodge

Premier Lodge is the UK's third-largest budget hotel brand. Whitbread is buying
132 hotels with 9133 rooms currently trading. Spirit will continue to operate an
additional seven hotels (229 rooms) under a franchise agreement.  The brand has
grown rapidly with 11 hotels (903 rooms) opening in 2003 and three hotels (529
rooms) opening in 2004 to-date.  A further nine hotels and 929 rooms are in the
development pipeline.

In the year ended December 31, 2003 the businesses acquired had revenues of
£114m and estimated PBIT of £29m.   Occupancy for the year was 74%.  Net assets
of the newly formed company being acquired are equal to the consideration paid.

Travel Inn

Travel Inn is the UK's biggest hotel brand with 304 units and 18,316 rooms with
an additional 534 rooms already in the pipeline.  It has had, consistently, the
highest occupancy of any major hotel brand at 80% and above.

In the financial year ended March 4th, 2004, Travel Inn contributed £74m of
operating profit to Whitbread - a 10% increase year over year.  Return on
capital also increased from 12.6% to 13.6%

Brewers Fayre

Brewers Fayre is the UK's largest pub restaurant brand with 248 existing units
rising to 267 following this transaction.  It is also one of the most successful
brands in the sector with operating margin of 16.0% and ROCE of 12.6% for the
2003/4 financial year.

About Whitbread PLC:

Whitbread PLC is the UK's leading leisure business, managing some of the UK's
strongest brands in hotels, restaurants and racquets, health and fitness clubs.
Whitbread's  65,000 employees serve millions of customers each month at around
1,900 locations across the UK.

Whitbread's brands include Travel Inn, Marriott, Brewers Fayre, Brewsters,
Beefeater, Pizza Hut, Costa, TGI Friday's and David Lloyd Leisure.

In the financial year to March 4, 2004, Whitbread generated pre-tax,
pre-exceptional profits of £240.8m on sales of more than £1.8bn.

Founded in 1742, the company is listed on the London Stock Exchange (as WTB.L)
and is a member of the FTSE 100 and FTSE4Good indices.

Further information is available from www.whitbread.co.uk.

Legal structure

The acquisition will be effected by the purchase of Spirit Intermediate Retail
Limited, whose subsidiary, Premier Lodge Newco Limited recently acquired the
Premier Lodge budget hotels business pursuant to an intra-group reorganisation.
The sale and purchase agreement and the intra-group sale agreement together
include warranties and undertakings from the sellers which are customary for a
transaction of this size and nature.  The sale and purchase agreement also
includes a working capital adjustment to the purchase price which will be
determined following completion of the sale.  On completion of the sale, Premier
Lodge Newco Limited will enter into an operations agreement with Spirit Group
Retail Limited, for an initial term of ten years dealing with the operation of
the co-located lodges where Whitbread is not acquiring the adjacent co-located
pub restaurants.

                      This information is provided by RNS
            The company news service from the London Stock Exchange