Jun. 17--Friendly Hotels, the quoted mid-market British hotel group in which Choice Hotels is a major shareholder, is understood to have put itself up for sale. 

The company is thought to have asked its adviser, boutique investment bank English Trust, to explore options for the group, which could lead to its sale. 

The company may come under pressure to issue a Stock Exchange statement this week, clarifying its position. Last night, Friendly declined to comment. 

Friendly has seen its share price collapse from a high of 179 pence five years ago to its close on Friday of 27 pence, giving it a market value of just UKpound 6.2 million. 

It has had a troubled few years, with the shares hit by a series of profit warnings. In February, Friendly completed a major capital restructuring, which it warned needed to be done to keep the business afloat. 

Shareholders backed the changes, which resulted in the company's net asset value increasing to UKpound 45.3 million. At the same time, Friendly Hotels also announced plans to reduce its bank borrowings through the sale of 13 non-core hotels, worth UKpound 36.4 million. 

Choice Hotels, for which Friendly is the master-franchise holder in most European countries, is thought to have examined the possibility of a takeover, but this has not resulted in a deal. 

In April, the company announced it had fallen into the red. At its preliminary results, it reported losses of UKpound 200,000 compared with a UKpound 4.4 million pre-tax profit the previous year. 

Chairman Andrew Speak said the figures represented what had been a "challenging year" for the UK provincial hotel industry. Since then, conditions have remained tough for the sector, with the foot-and-mouth crisis affecting tourism. 

Friendly is one of Europe's largest hotel groups. It has more than 260 hotels in the UK, Ireland and continental Europe. 

The company has also seen a number of boardroom changes in recent months. Michael Finkelman joined as chief executive in April from Queens Moat Houses, while Ian Rollason resigned as finance director in March. The group has yet to announce his replacement. 

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