Ladbrokes has made a £240m takeover approach to online gaming company 888, according to a newspaper report.
Ladbrokes, which is being advised by Deutsche Bank Greenhill, has made an offer of 70p a share, substantially more than its 49p share price on Friday, according to the Sunday Telegraph.
Ladbrokes yestersday confirmed it was in "very preliminary discussions" with 888 but refused to discuss details and said there was no certainty an offer would be made.
The newspaper also claimed that other companies, including online rival Sportingbet, are also in the running to make an offer for 888.
Ladbrokes tried to buy 888 four years ago for 470m, according to the newspaper, but the deal fell through because of concerns that its target could be prosecuted by the American Department of Justice (DoJ) as part of a crackdown on online gambling.
Ladbrokes' internet business is seen as one of its problem areas and it has lagged behind William Hill's since its rival forged an online joint-venture with Playtech, said the newspaper.