Property investor Starwood Capital and Apollo Global Management, the private equity firm, are said to be battling it out for control of the company, with final bids due at the end of the month.
Advent International is said to be no longer in the running, The Sunday Times said.
The hotel company, co-owned by Goldman Sachs, GoldenTree Asset Management and Avenue Capital, was saved from the brink of collapse in 2012 by the trio, who are now looking to exit their stake.
Deutsche Bank were appointed this summer to advise them on a potential sale or flotation.
Under leisure industry veteran Peter Gowers, who was brought in in 2013 to lead a turnaround, Travelodge has seen a bounce back in sales after spending £100m revamping its rooms and launching new hotels. It now has over 500 sites and reported an 18 per cent rise in sales to £261m in the first half of the year.