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NEW YORK (The Deal) -- Gaming company 888 Holdings on Friday burst back into the auction for Bwin.party Digital Entertainment to secure a deal for its Gibraltar rival that values its stock at £898.3 million ($1.4 billion).

The move usurps GVC Holdings of the Isle of Man, which was bidding with Canada's Amaya (AMYGF) (AYA) and which had appeared to be the frontrunner when Bwin.party on July 9 announced talks with the company about a cash offer worth about £906.5 million.

888 is to offer Bwin.party shareholders 39.45 pence in cash and 0.404 of a new 888 share, which would leave the target's investors with 48.9% of the enlarged company.

The companies said that the offer values Bwin.party at 104.9 pence per share; GVC's offer was worth 110 pence.

All three companies are listed in London, and 888 is also based in Gibraltar.

The 888 offer is 16.4% more than Bwin.party's May 14 share price, just before it announced it was in talks with third parties about "business combinations." Bwin.party had disclosed bid interest back in November, however, and has been reviewing its options for about a year.

888 will take on a new $600 million term loan to finance the cash portion of the offer.

888 said that the enlarged company would have had revenue of $1.1 billion last year. It expects unspecified cost savings and revenue benefits from the transaction, including by combining the two companies' digital-gaming platforms.

It said that the fusion will boost earnings in the first full year before one-time costs.

Bwin.party had earnings before interest depreciation taxes and amortization of €101.2 million ($110.2 million) on revenue of €611.9 million last year.

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Other pending deals in the fast-consolidating gaming sector include the potential merger of Ladbrokes, which has traditionally focused on betting shops rather than online gambling, with the Coral Group betting unit of private-equity-backed Gala Coral Group. Coral Group includes U.K. betting shop arm Coral Retail, Italian betting shop operation Eurobet Retail and an online business.

The combination would have a market value of well over £3 billion.

The scheme of arrangement takeover of Bwin.party by 888 requires clearance from a majority of Bwin.party shareholders by number and three-quarters of the votes cast at a shareholders' meeting.

The companies expect the transaction to close late this year or early next year.

888's advisers are Investec Bank's Garry Levin and Duncan Williamson, and Stifel, Nicolaus' Derek Herbert and John Orem.

Deutsche Bank team advising Bwin.party includes James Arculus, James Maizels and Charles Wilkinson.

Allen & Overy is acting as legal adviser to 888, and Freshfields Bruckhaus Deringer is Bwin.party's law firm.

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