A major hotel merger is the works with Hyatt group to purchase Starwood Hotels & Resorts.
Starwood, which owns several brands including St. Regis, Sheraton, W and Westin-- is valued over $13 billion while the much smaller Hyatt has a valuation of about $7 billion, reports the Wall Street Journal.
In an earnings call yesterday, Starwood’s CEO said the company was nearing a deal to sell the company or merge with another hotel chain.
"This has the company's highest attention," interim CEO Adam Aron said. "Our clear goal is to optimize the value for our shareholders."
Back in April, Starwood announced its board was exploring strategic options for the hotel company. At the time, Starwood didn't mention a sale, but analysts considered it a possibility.
Speculation about a potential buyer heated up this week. First the Wall Street Journal reported that three Chinese companies were seeking government approval to place bids for Starwood. Then Wednesday CNBC reported that Hyatt Hotels Corp. was close to purchasing Starwood in a cash and stock deal that would leave Chicago-based Hyatt's management in control of the combined company.
Spokeswomen for both hotel chains declined to comment about any possible deal.
"Our progress is active and nearing conclusion," Aron told investors Wednesday afternoon. He wouldn't comment on any specific deal, but said: "I would be surprised if we don't have answers to these questions by the end of this calendar year."
Starwood Hotels & Resorts Worldwide Inc., based in Stamford, Connecticut, operates 1,271 hotels with a combined 362,623 rooms. Hyatt, has 618 hotels with a combined 160,205 rooms.
A merger of the two would help the new company better compete with hotel giants Marriott International, Hilton Worldwide and Intercontinental Hotels Group, all which have more than 4,000 properties and roughly 700,000 rooms each.
The Associated Press contributed to this report.