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Royal Bank of Scotland buys 46 UK Marriott hotels for £951.4m

21 April 2006

The Royal Bank of Scotland (RBS) has bought 46 Marriott hotels in the UK for £951.4m from Condor, the joint venture set up between Whitbread and Marriott.

Condor was established in March 2005 as an interim holding company for the hotels after Whitbread decided to exit the four-star hotel sector and relinquish the UK franchise for the Marriott brand.

Whitbread will receive £237m from the sale, on top of the £710m it received last year when the joint venture was set up. The transaction will enable the company to pay out another £400m to shareholders in addition to the £400m special dividend it deliverd last May.

"This sale brings the excellent partnership that we have enjoyed with Marriott International to a close," said Whitbread chief executive Alan Parker.

RBS has earmarked £65m to upgrade the hotels over the next five years. Marriott will continue to run the hotels under a long-term management agreement.

In a separate deal, RBS is also buying a Marriott hotel development site in Leicester for £30m from Whitbread.

The sales leave Whitbread free to focus on its budget Premier Travel Inn brand and, say industry observers, to pursue the rival Travelodge budget chain.

£1b deal for Condor >>

Premira looks at Travelodge options >>

Marriott International >>

By Angela Frewin

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