Catesby to lead Swallow buyout?

Swallow Hotels could resurface as a smaller hotel company if Whitbread decides to dispose of some of the hotels it acquired in its £578m takeover of the group last year.

Former Swallow chief executive Peter Catesby, who is on so-called gardening leave until September, is understood to be considering a management buyout of some of the hotels that Whitbread may wish to sell.

Catesby, who will receive just under £800,000 as a result of exercising share options he held with Swallow, is expected to approach City investors to fund a deal involving at least 10 hotels.

The new company would then be floated on the Stock Exchange.

Whitbread executives are in the process of assessing the portfolio of 38 hotels to pick out those which would not fit with the Marriott hotel brand.

A spokesman said: "If there are any that cannot be brought up to the Marriott standard, we would consider selling them."

Hotels that may be deemed unsuitable include the 122-bedroom Imperial in Newcastle upon Tyne and the 45-bedroom Eden Arms Hotel at Bishop Auckland in County Durham.

When asked about his future plans, Catesby said he was considering a number of options: "I love hotels and I feel I am far too young to hang up my boots and dig the garden."