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* Parvus says tie-up has "limited strategic logic"
* William Hill says has duty to assess it
* Parvus says wants all other options considered (Adds detail from letter, bullet points, background)
By Simon Jessop
LONDON, Oct 13 (Reuters) - A leading investor in Britishbetting company William Hill, Parvus Asset Management,said it would oppose any reverse takeover of Canadian firm Amaya, given its "limited strategic logic".
Parvus said a deal would also "destroy shareholder value" inan open letter to the board on Thursday, and it wanted the firmto consider all alternative options for maximising shareholdervalue, including a sale of the company.
The firms had announced talks on a tie-up on Oct. 7, justtwo months after William Hill rejected a revised takeoverapproach from online rival 888 and casinos and bingohalls operator Rank Group.
William Hill said it was still assessing a tie-up.
"It shouldn't take more than five minutes of the board'stime to realise this deal doesn't pass the smell test," Mads EgGensmann, co-founder of 4.3 billion euro Parvus told Reuters.
Gensmann said he had no preferred strategic option, but hewanted the board to evaluate each on its merits, adding thattheir judgment in pursuing Amaya had been "clearly lacking".
In response, a spokesman for William Hill said given thestrategic fit, diversification and potential synergies of anAmaya deal, it had a responsibility to fully assess it.
"However it is premature for us to draw conclusions whilstthis work is ongoing. The Board would not come forward with atransaction unless it was satisfied that it was in the interestsof all shareholders."
Parvus said it was the largest investor in William Hill,with a 370 million pound ($460.10 million) economic interestcovering 14.3 percent of its outstanding shares using aderivatives called contracts-for-difference, which it wouldconvert to shares if an Amaya deal was put to a vote.
After first buying into the firm in March 2014, the lettersaid Parvus had been supportive of the owners "despite the manyoperational missteps and weak share price performance", whichGensmann said included the implementation of its Trafalgarplatform, which had left it a "market share loser online".
On the proposed deal with Amaya, Parvus said the Canadianfirm's core business of online poker was the least-attractivesegment within online gambling and a tie-up would weaken WilliamHill's strategic position in the long run.
Parvus also said the potential deal's financial structurefavoured Amaya shareholders at the expense of William Hill's,despite the latter's far superior cash-flow generation.
"Effectively, you're buying an overvalued asset using anundervalued currency," he said, citing moves in the value of theCanadian dollar and sterling since the start of the year.
Gensmann said the arguments used against starting talks withRank and 888, which included the complexity of any potentialtie-up, and those used for a deal with Amaya - a complex,cross-border "transformational deal" - displayed "blatant doublestandards".
"We strongly encourage that the board and management stopswasting valuable time and shareholder resources pursuing thisvalue-destroying deal," Parvus wrote.($1 = 0.8042 pounds) (Reporting by Simon Jessop; editing by Pamela Barbaglia andAlexandra Hudson)
