* Bwin confirms received a revised proposal from 888
* Says evaluating Bwin and GVC proposals
* GVC confirms making a formal offer to Bwin (Adds analyst comments; background; share movement)
By Aastha Agnihotri and Neil Maidment
Sept 1 (Reuters) - Online gambling firm 888 Holdings stepped up a billion pound battle for Bwin.party DigitalEntertainment on Tuesday, submitting a revised takeoverproposal as it looks to see off rival interest from GVC Holdings.
Gambling companies are seeking to expand in response tohigher tax bills and tighter regulation in Britain andcontinental Europe. Size is also seen as vital to ensurecompetitiveness in an online market buoyed by the use of tabletsand mobile.
Bwin, which like smaller rivals 888 and GVC, offers casino,poker, bingo and sports betting, had accepted a 900million-pound ($1.4 billion) cash and shares offer from 888 inJuly, preferring it to a higher but more complex offer from GVC.
GVC, owner of the Sportingbet brand, has since worked withBwin to iron out a number of concerns and has made an improvedoffer, valuing the company at around 1.06 billion pounds.
888 responded by revising its own bid over a long holidayweekend, albeit with a number of undisclosed pre-conditions.
Bwin, up for sale since November, did not give details of888's new proposal but said it would now evaluate it alongsidethe one from GVC. 888, whose market value is roughly two-thirdsof Bwin's, also declined to comment on its offer details.
By joining forces, bigger players can be better protected ina harsher tax environment than smaller firms which are likely eventually to be squeezed out of the market. Growth prospectsfor merged firms also improve as they have more to spend on ITand marketing.
BIGGER RIVALS
In recent weeks heavyweights Paddy Power andBetfair have agreed a merger in principle, whileLadbrokes and Gala Coral have struck a similar deal.
William Hill, whose position as Britain's leadingbookmaker has been attacked by the recent consolidation, is alsounder pressure to respond. The firm had a bid for 888 turneddown in February this year.
GVC's offer of 128.48p based on Friday's close is 25p cashand 0.231 of a new GVC share, while 888's offer accepted in Julywas 104.09p, made up of 39.45p in cash and 0.404 new 888 sharesfor each Bwin share.
At 26.1 times forward estimates, Bwin is about 50 percentmore expensive than its rivals, according to Thomson Reutersdata.
"My view is 888 is in a stronger position: bigger business,stronger balance sheet, they are main market listed. They havegot much longer track record in terms of the management team andmuch higher rating for the stock," analyst Simon Davies ofCanaccord Genuity said.
Davies expects a new offer price of 115p or more from 888.
888 has promised cost benefits of at least $70 million perannum by the end of 2018, although analysts expect a far greaterfigure could be achieved. Smaller, AIM-listed GVC has promisedbenefits of more than $150 million per annum by the end of 2017.
Bwin said its board's unanimous recommendation of 888'soffer, that was announced on July 17, was unchanged by Tuesday'sannouncement, although it could yet have a change of heart andchoose GVC.
Bwin shares, up 27 percent on a year ago, were down 0.2percent at 116.2p at 1010 GMT, valuing the business at around960 million pounds.
GVC's shares, up 3 percent in a year, were up 0.8 percent at451.5p, while 888's were up 0.6 percent at 163 pence havingrisen 27 percent in a year.
($1 = 0.6519 pounds) (Editing by Anupama Dwivedi and Keith Weir)
