US casino owner Caesars has said it is in “advanced discussions” to buy gambling firm William Hill for around £2.9 billion.
Last week, William Hill told investors it had received takeover approaches from Caesars and private equity giant Apollo.
Caesars said the board of directors at William Hill have indicated the offer is at a level that “they would be minded to recommend to shareholders”.
The US firm said the offer would be 272p for each William Hill share, representing a 25% premium on Thursday’s closing share price of 217.6p.
However, shares in William Hill surged to 312.2p at the close of play on Friday on the back of the takeover speculation.
Caesars said it has completed due diligence and would expect any deal to be completed in the second half of 2021.
The US company already owns a 20% stake in William Hill’s US operations, which also have exclusive rights to operate sports betting under the Caesars brand.
Tom Reeg, chief executive of Caesars, said: “The opportunity to combine our land-based casinos, sports betting and online gaming in the US is a truly exciting prospect.
“William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast growing US sports betting and online market.
“We look forward to working with William Hill to support future growth in the US by providing our customers with a superior and comprehensive experience across all areas of gaming, sports betting, and entertainment.”