Shareholder payout abandoned at Whitbread

Whitbread, the leisure giant, has deferred plans to hand back £900 million to its shareholders blaming the turmoil in the credit markets.

It had planned to borrow £600 million on the bond markets issuing debt secured on its hotel and restaurant property assets before handing the proceeds to investors. However, the group is now planning to buy back £300 million of its own shares and give that to shareholders.

Whitbread commented that they had been advised to carry out this action and that they will be reviewing the matter in the next few weeks. However, they cautioned that whatever happens in debt markets is out of their control and added that it is not in the best interests of their shareholders to proceed. This statement ruined news of a lift in trade at Whitbread’s Brewers Fayre and Beefeater restaurants.

Shares of Whitbread, which wiped out its debts when it sold the David Lloyd Leisure fitness club chain in June for £925 million, soared 54p to 1612 following the statement.

Whitbread Plc is the UK’s leading hospitality company, managing the number one brands in hotels, restaurants and health and fitness clubs, including Premier Travel Inn, Brewers Fayre, Beefeater, and Costa.

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