Bwin.party Digital Entertainment has agreed to a buyout offer from GVC Holdings of about £1.06 billion, shifting its stance after the poker and sports betting firm had accepted an earlier offer from rival 888 Holdings.
GVC and 888 have been trying to outbid each other over the past few months in the battle for larger rival Bwin.
Gambling firms are trying to bulk up in response to higher tax bills and tighter regulation in Britain and continental Europe.
Size is also seen as vital to ensure competitiveness in an online market buoyed by the use of tablets and mobile.
GVC's offer of 25 pence in cash and 0.231 new GVC shares works out to about 129.64 pence per Bwin share based on the stock's close yesterday.
The offer is at a 12.5% premium to Bwin's share closing and at a 45% premium to its stock price since it first received proposals in May.
Bwin said GVC's higher offer as well as its track record of integrating acquisitions, such as that of Sportingbet in 2013, and a higher expected cost savings were all factors for switching its allegiance from 888.
Bwin had accepted a £900m cash and share offer from 888 in July, preferring it to a higher but more complex offer from GVC.
GVC said it would fund the cash portion of the deal through a £400m loan from Cerberus and would raise £150m through a placing of new shares.
