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By John Tilak and Alastair Sharp
TORONTO, Oct 7 (Reuters) - Canadian online gambling companyAmaya Inc and British bookmaker William HillPlc said they were in talks to combine in a merger ofequals, confirming a Reuters report about the discussionsearlier on Friday.
The all-share merger would be "consistent with the strategicobjectives" of both companies, they said in a joint statement.
Amaya has received strong buyout interest from othercompanies in the industry and some private equity firms, twosources familiar with the situation said.
The statement did not mention GVC Holdings Plc, asports betting and gaming company based in the Isle of Man whichthe sources had also cited as a suitor. The sources spoke oncondition of anonymity because they were not authorized todiscuss the matter publicly.
GVC did not respond to a request for comment.
The sources also said that former Amaya Chief ExecutiveDavid Baazov, subject of an insider trading investigation fromQuebec's securities regulator, had abandoned plans to bid forthe company. Amaya said in February it had received a nonbindingproposal from Baazov to take the company private, but the formalbid never came.
The bids for the operator of online gambling websitePokerStars were above Baazov's planned offer price of C$21 pershare, the sources said.
Amaya's stock jumped on the Reuters report and trading washalted within minutes, at C$23.41, up 9.1 percent on the day, inToronto. The level was the highest in about 11 months. Thecompany had a market capitalization of about C$3.1 billion($2.34 billion) before the rally.
Baazov had prepared a bid but waited to sort out issues withthe securities regulator before submitting it, the sources said.He was mulling a bid as recently as the summer, they said.
Baazov resigned as CEO in August and was replaced by RafiAshkenazi.
William Hill, itself a subject of an approach from 888Holdings and Rank Group, rejected a revisedtakeover bid from the two rivals in August.
Amaya paid $4.9 billion to acquire the owner and operator ofthe PokerStars and Full Tilt Poker brands in 2014, saying at thetime that the deal created the largest publicly traded onlinegaming company.
The company's biggest revenue contributions are from theIsle of Man and Malta, while it has also expanded into France,Italy, Spain and Britain, and expects to soon gain regulatoryapproval to operate in the Czech Republic and the Netherlands.It sees its biggest growth opportunity in the United States.
After a lengthy approval process, Amaya won permission tooperate PokerStars in New Jersey, one of the first U.S. statesto legalize the business.
The company last year limited the operations of itsStarsDraft fantasy sports business in most U.S. states as astring of jurisdictions grapple with whether the fast-growing,multibillion-dollar industry constitutes illegal gambling.
Contests such as StarsDraft, in which players draft fantasyteams for sports including football, basketball and baseball,have drawn increased scrutiny from regulators since last year.
($1 = 1.3256 Canadian dollars) (Reporting by John Tilak and Alastair Sharp in Toronto, andPaul Sandle in London; Editing by Grant McCool and RichardChang)
