Shares of Marriott International Inc rose more that 4 percent on Tuesday on takeover speculation after the hotel operator announced plans for a $300 million bond sale.
Marriott shares climbed 4.7 percent to $42.61 on renewed and unconfirmed buyout chatter, the flyonthewall.com reported on Tuesday.
Options trading volume surged to nearly six times the daily average, wrote Interactive Brokers Group option analysts Andrew Wilkinson and Rebecca Engmann Darst in their daily commentary.
It appears that nearly half of today's active volume is seated in November $45 calls, which were bought heavily, along with November $50 calls, also heavily bought, they said.
The latter strike implies a push for Marriott shares toward the 52-week high of $51.85.
Implied volatility, the expected magnitude of share movement based on option prices, has surged nearly 22 percent to 38.5 percent an indication that an additional catalyst may be driving the option action, they said.
Marriott, which operates hotels under brands such as Marriott, Ritz-Carlton and Fairfield Inn, was previously the subject of buyout speculation when private equity firms eagerly acquired hotel companies earlier this year.
In July the Blackstone Group agreed to purchase Hilton Hotels Corp for about $20.1 billion, after Goldman Sachs Group Inc's Whitehall unit in June agreed to buy hotel REIT Equity Inns for about $2.2 billion.
But the credit crunch has since hindered private equity firms' ability to finance large buyouts, as banks are more limited in how much they can lend.