The mooted merger between Premier Inn and Travelodge to create a budget hotel behemoth is '50 to 60 per cent likely to happen', according to sources close to the talks.
Whitbread, which owns Premier Inn, Britain's biggest hotel chain with more than 500 properties, is in early-stage talks to acquire its rival from Dubai International Capital (DIC) in a cash-and-shares deal worth an estimated £600 million to £700 million.
A source close to the process said: 'It has got beyond a conversation, and there is a willingness to progress, but none of the important issues have been agreed yet. For example, how do you value the site pipeline?'