It’s been said that both Del Toro and director Sam Raimi (Evil Dead, Spider-Man) are both in the running for the coveted project but if rumors will be believed, it is Del Toro who is the front runner for the project.
Del Toro himself has told in interviews that he would love to work on The Hobbit and it looks like he really may get the job. According to some insiders it is just the ongoing writers’ strike that is stopping Jackson and Del Toro from meeting and working on the script with a writer (who hasn’t been hired yet). The prevailing consensus though is to make The Hobbit two back to back movies.
I like the sound of that.