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. Last Updated: 07/27/2016

U.K. Marriotts to Go on Block

LONDON -- British leisure group Whitbread said Monday it will sell its Marriott hotels in Britain for at least 710 million pounds ($1.3 billion).

Whitbread has agreed to set up a joint venture with Marriott International, the U.S. owner of the brand, which will hold the four-star and five-star hotels until they are sold. Whitbread said the hotels would be operated by Marriott under long-term management contracts that would continue after the sale.

Under the terms of the deal, Whitbread will put 46 hotels in Britain into the joint venture. Six are in London, 31 in regional areas and nine are classified as country clubs.

Whitbread will receive ?710 million this year, with the balance of the transaction dependent on the proceeds of the final disposal of the hotels, which it has operated under a franchise agreement since 1995.

Whitbread expects to receive at least ?290 million pounds more once the Marriott (U.K.) hotels are sold.

The move will see ?400 million returned to shareholders via a special dividend and enable Whitbread to focus on the budget hotel sector, where its Premier Travel Inn chain leads the market with a 40 percent share.

About ?100 million ($193 million) will be spent by Whitbread on closing the gap in its pension fund, and the rest of the cash will go toward repaying debt.

The company, which employs about 67,000 people at around 2,000 locations throughout Britain, sold its breweries in 2001 and focused on hotels, restaurants and health and fitness clubs.