888 confirms it has submitted a proposal to buy Bwin, saying a combination of the two firms has ‘significant industrial logic’.
The proposed deal, which would create a business worth more than £1 billion, drives Bwin’s shares up 10% to 109.8p.
888, down 3.5% to 163.6p, says shareholders holding 59% of its share capital have committed to vote in favour of the deal.
GVC announced its bid on Friday and said the deal would be treated as a reverse takeover of Bwin, whose market cap is about three times higher.
Since November Bwin has been the subject of numerous merger and acquisition rumours, with William Hill (WMH), Playtech (PTEC) and Canada-based Amaya Gaming (AYA:TSX) also speculated to have been considering a takeover.
Amaya is seen as a logical company to help support GVC's takeover, each business taking part of Bwin in the same way that GVC and William Hill collaborated when buying Sportingbet in 2012.
Bwin’s earnings fell by 6% last year – its third annual fall in earnings – as a result of weakness in the European poker market and Greece’s move to block gambling websites.
A takeover of Bwin would be the latest in a series of deals in the gambling sector. 888 was a bid target for William Hill earlier this year but the deal fell through after 888’s co-founder Avi Shaked said the offer price was too low.
The wave of consolidation is expected to continue because many gambling companies have struggled to meet the huge rise in regulation and taxes, the latest being the UK’s Point of Consumption tax.