Frthr re Demerger/Offer

Whitbread Holdings PLC
28 March 2001


    Not for release, publication or distribution in or into
  the United States of America, Canada, Japan, Australia or
                       the Netherlands


                   Whitbread Holdings PLC
                              
 Recommended proposals for the demerger of the Pubs and Bars
  Division in anticipation of an offer being made by or on
   behalf of a company specially formed by MGPE ('NewCo')


Whitbread Holdings PLC ('Whitbread Holdings') announces that
a circular (the 'circular') has today been posted to
shareholders.  The circular contains proposals recommended
by the Board for the demerger of the Pubs and Bars Division
to Fairbar Limited ('Fairbar'), a specially formed company
outside the Whitbread group, by means of a reduction of
capital of Whitbread Holdings under section 135 of the
Companies Act, in anticipation of an offer being made for
Fairbar by or on behalf of NewCo.

An Extraordinary General Meeting of Whitbread Holdings will
be held on Friday, 20 April 2001 for shareholders to approve
these proposals, as well as to change the name of Whitbread
Holdings to Whitbread PLC ('Whitbread').  The reduction of
capital will be accompanied by a 3 for 5 consolidation of
the ordinary share capital of Whitbread Holdings.

Upon shareholders approving the proposals, a court hearing
to confirm the reduction of capital is expected to take
place on Wednesday, 9 May 2001.  This would be the last day
for dealings in Whitbread Holdings shares.  It is intended
that the steps required to make the reduction of capital,
the demerger and the share consolidation effective would
then take place prior to 7.40 a.m. on Thursday, 10 May 2001
to enable dealings in Whitbread shares to commence that
morning.  Should it not be possible to complete such steps
prior to that time, dealings in Whitbread shares would
commence on Friday, 11 May 2001.

It is expected that the offer by or on behalf of NewCo would
be made within five business days of the reduction of
capital and demerger becoming effective.

Copies of the circular are obtainable on request, by
application to the Company's Registrars, Lloyds TSB
Registrars of The Causeway, Worthing, West Sussex BN99 6DA
(telephone: [phone]).

Enquiries:

Whitbread Holdings
David Reed                            [phone]
Jeremy Probert                        [phone]

Dresdner Kleinwort Wasserstein        [phone]
David Barclay
Nigel Binks

Gavin Anderson & Company              [phone]
Chris Salt
Laura Hickman

Dresdner Kleinwort Wasserstein, which is regulated in the
United Kingdom by the Securities and Futures Authority
Limited, is acting for Whitbread Holdings and for no one
else in relation to the matters discussed herein and will
not be responsible to anyone other than Whitbread Holdings
for providing the protections afforded to its customers or
for providing advice in relation to the matters discussed
herein.