THE Whitbread leisure group has entered the €1 billion (£680m) bid battle for Jurys Inns. The Irish hotel chain has attracted strong interest since it was put up for auction this year.

Other contenders for the business are said to include private-equity firm Permira and Robert Tchenguiz, the property tycoon.

Whitbread, owner of the Premier Travel Inn hotel chain, would have no problem funding a deal and is keen to find suitable acquisitions in the hotel sector.

It is in the early stages of selling its David Lloyd Leisure fitness clubs, which could raise up to £1 billion.

At its preliminary results this Tuesday, Whitbread, headed by chief executive Alan Parker, is likely to confirm that talks about a possible sale are continuing. It is making financial information on David Lloyd available to a limited number of interested parties, including rival operators Esporta and Next Generation.

Parker is also expected to announce that he has had the group’s properties revalued for the first time in a decade and that they are now worth somewhere between £18 and £20 a share.

That would equate to a value of up to £3.9 billion, representing a £1.8 billion surplus to the estate’s book value.

The Whitbread group has £970m of net debt, and may choose to pursue a sale-and-leaseback of the properties or inject them into a real-estate investment trust.

Christopher Rogers, the finance director, is conducting a review of Whitbread’s capital structure but he is not expected to give the full details of his thinking until June.

Whitbread’s shares have risen 59% over the past year, closing at £19 on Friday.

Part of this is because the City has factored in a revaluation of the company’s real estate. There has also been bid speculation surrounding Whitbread although, to date, the company has not had any takeover approaches.

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