Whitbread is in advanced discussions to buy budget hotel chain Premier Lodge, the leisure group said today.
It said: "Whitbread confirms it is in advanced discussions which may or may not result in a transaction."
The announcement followed recent articles in The Times and TheSunday Times that said Whitbread was now in exclusive talks with Premier Lodge's owner Spirit Group after defeating rival contender venture capital firm Apax Partners in the final round of bidding.
The £540m deal is expected to be completed this week.
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