SHARES in Whitbread soared yesterday after it revealed plans to sell its 3,000 pubs in order to focus on its core hotels, food and leisure divisions.

The group said ''Future Whitbread'' would concentrate on its Marriott and Travel Inn hotels, its Brewers Fayre and Beefeater restaurants and its David Lloyd Leisure business.

The future of its pubs and bars will be "under a different ownership structure with higher leverage or the potential for cost synergies".

Following the pub shake-up, the group will return around 75 per cent of the net proceeds to shareholders, and will use the remainder to repay existing Whitbread debt.

Although the group would not put a price on an amount it hopes to gain from the sale, it is believed the pubs division could be worth around £1.6bn.

The division includes Whitbread's 1,710 leased pubs, which are mainly local and rural sites, its 1,095 managed pubs, including its Wayside Inns, Shotz and Champion brands, and its 193 high street pubs and bars, including Hogsheads and Casa.

For the last six months the pubs and bars generated underlying earnings of £104 million on sales of £341m.

Chairman Sir John Banham said: "This is a radical plan to focus Whitbread, generate fast earnings growth and improve shareholder returns.

"The restructuring creates the opportunity and the momentum to manage Whitbread's brands and property assets more aggressively and to take full advantage of Whitbread's leading positions in growth segments of the UK leisure market.

"It will also result in a substantial return of value to shareholders."

The group described its pub network as a "great business" and expected a price to reflect that.

Whitbread added the pubs business management were ''very highly motivated'' however a management buy-out was ''not on the cards at all''.

A more likely route is a sale to a private equity or trade buyer, either as a whole concern or split up