A bid battle has broken out for Bwin.Party Digital Entertainment (LON:BPTY) as GVC Holdings offered about £1bn for the online bookmaker.
Sportingbet operator GVC, which offered 122.5p a share for Bwin, has trumped a £900mln, 105p-per-share bid from rival 888 Holdings.
GVC plans to fund the indicative proposal with new GVC shares to Bwin.Party shareholders and a €400mln senior secured loan provided by affiliates of Cerberus Capital Management. It also intends to raise about £150mln through an equity placing of new GVC shares for cash.
GVC said: "There can be no certainty that an offer for Bwin.Party will be made by the company. GVC reserves the right to amend the cash component of any offer.
"The GVC board will update shareholders in due course."
The news follows a rise in merger and acquisition activity in the gaming sector, with private equity firm CVC buying a controlling stake in Skybet last December in a deal valuing the latter at £800mln.
Ladbrokes (LON:LAD) is also merging with Gala Coral in a deal set to create a betting group worth £2.3bn.
Bwin was founded under the name Simon Bold in 1999.
It was taken over by Austria's Bwin Interactive Entertainment in 2001 before merging with Partygaming in 2011.
Bwin shares rose 1.6p to 110.2p in early trading in London.