Smaller sports betting and gaming company GVC Holdings Plc (GVC.L) confirmed on Friday that it had bid for Bwin which said last November that it was in talks with a number of parties.
Bwin shares were up more than 10 percent at 109.8 pence at 0920 GMT, catapulting them to the top of the FTSE-250 Midcap gainers list .FTMC.
"I certainly think it's realistic to think you would get an offer pitched at the 115 (pence per share) level. Possibly higher if you've got multiple bidders," Canaccord Genuity analyst Simon Davies told Reuters.
That price would value Bwin at around 950 million pounds ($1.5 billion).
Shares in 888 -- which did not disclose a deal value but indicated it was a cash-and-stock offer -- fell 4.3 percent and were among the biggest losers on the London Stock Exchange. Its market capitalization is around 600 million pounds.
Consolidation in the gambling industry had been anticipated as higher taxes and tougher regulations in Britain and other major European markets have been hurting companies.
Analysts also named Canada's Amaya Gaming (AYA.TO), which last year bought online gambling sites PokerStars and Full Tilt Poker, as another possible bidder.
888, which offers casino, poker and bingo games and is expanding its sports betting business, said in March that it was on the hunt for acquisitions as it had enjoyed strong growth with more gamblers moving online.
"... There's no doubt that 888 have got much more in the tank in terms of the synergy benefits of such a transaction ... So I think if 888 are serious, it would be very difficult for GVC to succeed in any offer," Peel Hunt analyst Nick Batram said.
Gibraltar-based 888, which ended talks on a takeover by William Hill Plc (WMH.L) earlier this year, said on Monday it saw "significant industrial logic" in combining with Bwin.
Bwin said in a separate statement that its board and advisers were conducting a detailed review of the proposals received.
888 said shareholders with an about 59 percent stake backed its offer. That would indicate support from the family trusts linked to the firm's Israeli founders.