May 19--A merger between Dallas-based hotel company Wyndham International Inc. and Bass PLC of Great Britain would strengthen both companies in the U.S. hotel market, analysts say. 

Bass, which owns Holiday Inn, Inter-Continental and other major hotel companies, is negotiating to buy Wyndham in a deal worth more than $4 billion, according to reports from London. 

Neither Wyndham nor Bass officials would confirm Friday that they are in merger talks, but hotel analysts say the transaction has been rumored for weeks. 

"It's been no secret that Wyndham has been for sale," said John Keeling of PKF Consulting. 

"Bass sold its brewing division to concentrate and expand their hotel holdings," he said. "Wyndham is a logical candidate for them to acquire." 

Wyndham, formed six years ago, owns, operates and franchises more than 240 hotels and resorts in the UnitedStates and abroad. 

The company's flagship is the Wyndham Anatole Hotel in Dallas. 

Wyndham has been righting its financial house after several years of problems. 

The company lost $325 million in 2000, but that was an improvement over 1999, when Wyndham lost more than $1 billion. 

The company was re-capitalized two years ago with $3.5 million from a group of investors that included New York-based Apollo Investment Fund. 

The new investors bought about 30 percent of Wyndham's stock, which was trading at $7 per share at the time. 

Wyndham closed Friday at $2.69, down 34 cents. 

Bass has a big enough purse to buy Wyndham or just about any other hotel company it chooses; the company made $4 billion last year when it sold its brewing subsidiary. 

This year, Bass bought Europe's Posthouse hotel chain for almost $1.2 billion. 

Wyndham has a stock market value of about $400 million and has about $3.5 billion in debt. 

"Bass wouldn't have to pay a huge incremental premium, making it relatively easy to secure," said Fraser Ramzan of Lehman Brothers International. 

A Bass-Wyndham merger would create one of the strongest companies in the U.S. hotel business, industry consultants say. 

"One of the ways Wyndham may benefit from a merger is they haven't been able to compete with the likes of Starwood [which owns Westin and Sheraton] and Hilton because they don't have enough product to deliver a strong frequent-traveler program," Mr. Keeling said. "This would give both them and Bass a larger distribution system." 

Bass also could use the merger to expand its high-end Inter-Continental Hotel chain, Mr. Keeling said. 

"I would think the better Wyndhams would become Inter-Continentals," he said. 

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