Whitbread, the owner of Premier Travel Inns, has put itself in pole position to win the auction of Jurys Inn, the Dublin-based hotels group, by completing the sale of its David Lloyd Leisure fitness chain to the billionaire Livingstone brothers for £925 million.

The sale of the David Lloyd fitness centres comes only a day before final bids are due for Jurys Inn, which operates 470 hotels and would be a complementary fit for Premier Travel.

Reports say Jurys Inn could fetch about £680 million.

Selling the profitable David Lloyd business, after an internal review, reduces Whitbread's debt burden and gives the firm fresh capital to launch a bid.

Whitbread is looking at a healthy profit on the deal, having paid only £185 million in 1995 for the David Lloyd centres, set up by the former British tennis player of the same name.

It sold David Lloyd leisure to London & Regional, the Livingstone's private property group that own the Next Generation Clubs.

Bank of Scotland, a regular financial backer of these sorts of property deals, is also involved.

The Times reported on Saturday that Whitbread was poised to complete the sale ahead of the Jurys Inn deadline.

Alan Parker, the chief executive of Whitbread, said: "Following the success of the management action taken in DLL over the last 18 months and a review of the health club market, we have decided that this sale represents excellent value for our shareholders.

"Whitbread is now well placed to deliver the ambitious growth plans for its hotels, restaurants and coffee shops."

It operates the Costa Coffee chain of coffee shops.

The sale price for David Lloyd represents more than 13 times the pre-tax and exceptional profits of £68.8 million that the centres made during the financial year to the beginning of March. Turnover was £237 million.

David Lloyd operates 60 clubs in the UK and Ireland, as well as seven in the Netherlands and one each in Spain and Belgium.

The Livingstones are expected to split it into two companies, a property firm and an operating company.

This is a similar plan to that proposed by Robert Tchenguiz for the supermarket group J Sainsbury. Sainsbury's rejected the idea.

Analysts at Panmure Gordon said that the £925 million tag was "slightly worse than expected" but still pushed up their sum-of-the-parts valuation for the leisure group to £23 a share.

Whitbread shares rose 10p to £19.08.

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