Lehman Brothers and Starwood Capital Group (SCG) are to form a joint venture to take over 35 of Le Meridien's owned or leased hotels.
Lehman Brothers which holds most of Le Meridien's debt and SCG said the hotels acquired by the joint venture would be managed by Starwood Hotels and Resorts but still under the Le Meridien brand.
Starwood Hotels is also planning to acquire Le Meridien's brand, management and franchise business. Currently Le Meridien has franchises to run just over 90 other hotels. These hotels will also remain under the Le Meridien brand.
The group's owned, leased and franchised properties amount to 130 in 56 countries. It has a further 21 properties in the pipeline.
A statement by Le Meridien said the proposals will be presented to its board as part of a recapitalisation programme.
While the offers from Lehman and SCG are "non-binding, Le Meridien expects the deals to be sealed by the third quarter of this year.
The proposals were welcomed by Robert Riley, Le Meridien's ceo. "If completed, these arrangements would at long last provide for the consensual recapitalisation of the Group.
"Its alignment with a robust multi-branded management company like Starwood Hotels should enable the Le Méridien brand and its hotels to thrive by enhancing revenue and accelerating growth.
"The joint venture with Lehman Brothers and Starwood Capital Group should provide a financially strong structure for the current owned and leased portfolio."
Le Meridien, founded by Air France in 1972, swapped owners several times before being bought by Nomura International in July 2001.
The chain was badly hit by the post-9/11 slump and fell heavily into debt after a £1.25bn sale and leaseback deal with the Royal Bank of Scotland.
The Royal Bank took back control of 11 of its UK properties including the flagship Grosvenor House in Park Lane, London after Le Meridien failed to meet its rental payments.
Under a deal in 2004, Lehman Brothers took on its multi-million pound debt.