Travelodge has Premier in its sights

BUDGET hotels chain Travelodge has joined the bidding for £500m-rated rival Premier Lodge, put up for sale by brewing giant Scottish & Newcastle.

Travelodge - owned by Permira, the venture capital group spun out of Schroders - said it was confident of persuading Premier's management that a deal with it, rather than a competing offer made by Whitbread, was the best fit.

Premier Lodge has been put up for sale along with S&N's 1,450 pubs and restaurants estate, which includes the Chef & Brewer and Rat & Parrot brands.

Premier Lodge, which last year had sales of £70m, has 132 properties and is third-largest of the budget-chains behind Travelodge and market leader Whitbread's Travel Inn. It is believed that both the venture capital-based pub groups interested in buying S&N's retail estate - Spirit and Laurel - would want to sell on Premier Lodge.

Travelodge chief executive Grant Hearn said: 'Whitbread is certainly talking big numbers - reportedly £500m - but their shareholders will focus very hard on any offer with the widespread belief it has overspent on ventures such as Café Rouge, Swallow Hotels, and Bella Pasta.'