Shares in NH Hotel Group, the Spain-listed hotelier, jumped by nearly 18% as family-owned Spanish hotel group Barcelo swooped to acquire its rival.
Barcelo released a statement this morning saying that it could offer €7.08 a share for NH.
NH shares traded 17.6% higher at 12.45 GMT, at €5.88, valuing the hotel firm at well over €2bn.
If the deal goes through, Barcelo expects to control 60% of the combined group.
It would create the biggest hotel group in Spain, leaping ahead of current leader Melia Hotels.
The enlarged hotelier would have 600 hotels under its control with nearly €4bn in sales.
In September, Spanish news sources reported that Barcelo had hired Spanish bank Santander to study a potential takeover of NH Hotel.