31st Jul 2006 14:30
Whitbread PLC31 July 2006 31 July 2006 WHITBREAD PLC SELLS PIZZA HUT UK JOINT VENTURE INTEREST Whitbread PLC ("Whitbread") has today announced an agreement to sell its 50%shareholding in Pizza Hut UK Limited ("Pizza Hut UK") to Yum! RestaurantsHoldings ("Yum"). The value agreed for the 50% interest is £112m. Afteradjustments for debt and other liabilities, Whitbread will receive £99m in cashon completion which is expected to occur in late September/early October 2006. Whitbread is the 50/50 joint venture partner of Yum in Pizza Hut UK and,accordingly, the sale is a related party transaction for Whitbread under theListing Rules of the United Kingdom Listing Authority. Completion is thereforesubject to approval by Whitbread shareholders. A circular convening the relevantshareholder meeting and providing further details of the sale will be despatchedto shareholders shortly. The sale is also conditional upon Yum receivingclearance from the EU competition authorities. Whitbread will initially use the proceeds from the transaction to pay down debtwhile it reviews its options for creating shareholder value. Maintaining anefficient balance sheet structure going forwards remains a priority for thecompany. In the announcement of its preliminary results on 25th April 2006, Whitbreadstated that it would be reviewing the nature and size of its investment in PizzaHut UK as part of its objective to focus on core businesses. Following adetailed review and discussions with Yum, it was concluded that a sale of the50% shareholding of Pizza Hut UK held by Whitbread to Yum represented the mostbeneficial strategic option for both parties. Alan Parker, Chief Executive, Whitbread said, "We have worked closely with our partners Yum to conclude a successful outcome within a short timeframe. Our exit from this joint venture is further evidence of the continuing progress we are making towards becoming a leaner and more focused group, concentrating our management and capital on those owned businesses in which we have leading positions and strong growth prospects." Pizza Hut UK is the UK's biggest pizza restaurant business with more than 650outlets. It was established as a joint venture between Whitbread and Pepsico in1982. Pepsico's 50% shareholding was transferred to Yum as part of the demergerof PepsiCo's KFC, Pizza Hut and Taco Bell interests in 1997. As at 2nd March 2006, Whitbread's carrying value of its investment in Pizza HutUK was £29.8m and in the twelve months to the 16th July 2006 profit before taxas shown in the management accounts were £14.3m of which Whitbread's share is50%. The last audited accounts for Pizza Hut UK, as at 4 December 2005 showedgross assets of £140.3m and profit before tax of £26.6m. For more information please contact: Christopher Rogers, Group Finance Director, Whitbread PLC +44 (0) 207 806 5491 Anna Glover, Communications Director, Whitbread PLC +44 (0) 1582 844439 Celia Gordon-Shute, Tulchan +44 (0) 20 7353 4200 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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