William Hill's share price jumped 10 per cent as markets opened this morning after gaming groups 888 and Rank confirmed they have teamed up to mount a joint bid for high street rival William Hill.
Rank's share price rose around three per cent at the open to 249p, while 888's stock was also up around three per cent to 228.36p.
Ailing bookmaker William Hill has been battling to break into the online betting market but has been losing ground to rivals.
Confirming its interest, the consortium warned, however, that no formal approach has been made and there is “no certainty” that one will be.
“The consortium sees significant industrial logic in the combination, through consolidation of their complementary online and land-based operations,” said a joint statement by Rank and 888.
The move turns the tables on William Hill, which last year made an unsuccessful £700m bid for online operator 888.
It has been a tough few months for William Hill. Its share price is down almost a third since March when it warned of a £25m fall in online profits in 2016.
The company said this morning that it would "listen to and consider any proposal which might be forthcoming from the consortium".
However, it added: "It is not clear that a combination of William Hill with 888 and Rank will enhance William Hill's strategic positioning or deliver superior value to William Hill's strategy which is focused on increasing the group's diversification by growing its digital and international businesses."
William Hill chief executive James Henderson announced last week he would be stepping down after failing to move the bookmaker on to the online market, with chief financial officer Philip Bowock set to replace him on an interim basis.
Tough new regulations and higher taxes are driving a wave of consolidation in the gambling industry. Ladbrokes and Gala Coral are coming together, while Betfair and Paddy Power merged in March.
Rank, the UK's biggest casino chain, and 888 now have until 5pm on 21 August to make a firm offer or walk away.