British online gaming company 888 Holdings has offered to buy bigger rival Bwin.Party Digital Entertainment.
The move raises the prospect of a takeover battle between 888 and GVC Holdings.
888, which ended talks on a takeover by William Hill earlier this year, said today it saw "significant industrial logic" in combining with Bwin, which put itself up for sale last year.
Sports betting and gaming company GVC Holdings said on Friday it had bid for Bwin.
Bwin's board and its advisers are conducting a detailed review of the proposals received to-date and will make a further announcement in due course, it said in a statement today.
Bwin had a market capitalisation of about £820m as of Friday's close, based on about 823 million outstanding shares.
Consolidation in the gambling industry has gathered pace as higher taxes and regulations in some of the biggest markets have been hurting companies.
888 said shareholders representing about 59% of its share capital had irrevocably committed to vote in favour of the proposed cash and stock transaction.
The online casino, poker and bingo games operator which is expanding its sports betting business had said in March that it was on the hunt for acquisitions, having benefited from strong growth with more gamblers shifting to online betting.
