Coach operators Shearings and Wallace Arnold could be poised to merge, in a deal that would make them the fourteenth biggest hotel chain in the UK.

As well as a fleet of 226 coaches, Wigan-based Shearings owns 36 hotels, while Leeds-based Wallace Arnold has a further nine.

If the two were to combine, the estate of 45 hotels would put them behind Thistle but ahead of Queens Moat Houses when it came to UK hotel brands.

Shearings last week confirmed that it was in talks with its rival, but insisted reports of a £100m takeover were premature.

Earlier this year Shearings investigated the possibility of floating on the Alternative Investment Market.

But this move was rejected by financial institutions, and has now led to talks between the two operators.

In a statement, Shearings conceded that with its market currently fragmented, “consolidation” was now an option.

The two companies had explored possible co-operation many times over the years, it said, meaning it was “natural” for discussions to take place.

But it added: “Any such discussions are purely preliminary at this stage.”

Wallace Arnold issued a near-identical statement.

by Nic Paton

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