Whitbread, the UK-listed leisure group, has confirmed that it is looking to sell its underperforming high street restaurant business Pelican. The firm announced in its annual results yesterday that it was seeking buyers for the firm, which trades under the Café Rouge and Bella Pasta brand names.
Last week, Whitbread was reported to be close to reaching a deal on the sale of Pelican with ECI Ventures. A spokesman for Whitbread has confirmed that the firm is in advanced negotiations with a prospective buyer and that an announcement was expected ‘in a matter of weeks’, although he refused to confirm the identity of the buyer. Nobody at ECI Ventures was available for comment.
Whitbread bought the 153 Pelican restaurants in 1997 for £133m, but the sale proceeds are not expected to exceed £29m. The company revealed yesterday it had written down the book value of the business from £50m to £24m. Whitbread first announced its intention to dispose of the Pelican chain in October 2001.
The disposal of Pelican will be the final stage in a restructuring programme that spanned more than two years and included the sale of the brewing arm and pub chain. Only the Curzon chain of gyms and twelve Swallow hotels have yet to be sold.
The Pelican chain of restaurants have proved financially troublesome for the leisure group. Whitbread reported a 36 per cent fall in pre-tax profits for the year to 2 March 2002, down to £213m following the sale of its pubs division last May. The results for the firm’s continuing operations showed a 7.6 per cent increase in profits to £187m on sales up 6.6 per cent.
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