The owner of Las Vegas casino Caesar's Palace is in "advanced talks" to buy British bookmaker William Hill for around £2.9bn.
Caesars Entertainment announced the offer of 272p per share would value William Hill at 25 per cent more than Thursday's closing share price.
William Hill’s shares soared on Friday after rumours spread that a takeover was on the way. The bookmaker was also approached by private equity giant Apollo last week.
William Hill's board has indicated that it would be minded to recommend the deal to shareholders, Caesars said.
The casino operator is said to be particularly interested in William Hill's US bookmaking business which has 170 sites in 13 states.
Caesars already owns a 20 per cent stake in William Hill's US operations, which also have exclusive rights to operate sports betting under the Caesars brand.
Gambling profits are on the rise in the US after a long-standing ban on sports betting was ruled unlawful by the Supreme Court. Campaigners have warned of an increase in the risk of addiction and gambling-related harm.
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."
Caesars said it has completed due diligence and would expect any deal to be completed in the second half of 2021.