Online gambling company Betfair today rejected a $1.4 billion takeover approach from private equity firm CVC Capital Partners.

The company said the offer was too low and had too many conditions attached.

The potential offer made last week by CVC, the largest shareholder in Formula One motor racing, was pitched at 880 pence per share, valuing Betfair at around £912m sterling.

The online gambling sector is growing quickly and is seen as ripe for consolidation.

Betfair, founded in 2000, operates a system that allows gamblers to bet against one another, removing the middleman or bookie.

Betfair floated in 2010 at a price of £13, but its shares have tumbled since then, with analysts saying the company has failed to clearly identify itself as a technology or gambling company.

Chief executive Breon Corcoran joined last August from bookmaker Paddy Power and has started to cut costs and pull out of markets such as Germany and Greece, where regulation is unclear or taxation rates are regarded as too high.

Betfair plans to issue a statement on May 7 to update investors on its trading performance and progress on implementing Corcoran's strategy. Its financial year runs until the end of April.

Betfair said its board had reviewed the proposal with its advisers and "rejected it on the basis that it fundamentally undervalues the company and its attractive prospects, and is highly conditional".

CVC believes it could turn Betfair around more quickly by running it as a private company, potentially leaving the existing management team in place.

It has been involved in the gambling sector before, buying leading British bookmaker William Hill in 1999 and floating it on the stock market three years later.