Evoke, the London-listed gambling company that owns William Hill and the 888 online casino brand, is in takeover talks with the US casino operator Bally’s Intralot.

The heavily indebted company said in a statement to the stock market that it was in discussions with Bally’s “regarding a possible offer” for the business at 50p a share, almost a third higher than its closing price on Friday and valuing the group at £225m.

It comes four years after the company, previously known as 888 Holdings, paid £2.2bn to buy William Hill’s network of 1,400 bookmakers. Since then, its shares have fallen by 90%.

Evoke told investors that a deal was expected to involve an all-share combination with Bally’s, with a partial cash alternative – but added that there could be “no certainty that an offer will be made or as to the terms on which any offer might be made”.

Bally’s will confirm whether it intends to make an offer or withdraw from talks by 5pm on 18 May, in line with City takeover rules. Evoke issued the statement after a report on the possible offer by the Sunday Times.

Evoke, which is headquartered in Gibraltar, has net debt of about £1.8bn and a market value of just £175m.

In December, the company appointed Morgan Stanley and Rothschild to conduct a review of strategic options in an attempt to “maximise shareholder value”.

The company has grappled with an increase in duty on online gaming from 21% to 40%, while duty on online sports was increased from 15% to 25% in April, with an exception for horse racing. The Evoke chief executive, Per Widerström, said the changes would cost the business up to £135m a year.

Last month Evoke said it would close about 200 William Hill betting shops from May, blaming cost pressures including the government’s tax rises.

Evoke has also had a series of management issues that have weighed on the business: in 2023, it removed its chief executive and suspended VIP customer accounts in the Middle East amid an internal investigation into a failure to follow anti-money laundering processes.

That came after the company agreed to pay a £9.4m fine in 2022, then the third highest in the history of British gambling regulation, over failings that led to customers amassing huge losses during the pandemic.

In 2017, the Gambling Commission issued 888 with a £7.8m fine, then a record, after more than 7,000 people who had voluntarily banned themselves from gambling were still able to access their accounts.

Bally’s, which is a front of shirt sponsor of Nottingham Forest Football Club, was bought by the Greek company Intralot in a €2.7bn deal last year. It is listed on the Athens Stock Exchange.

Bally’s owns a stable of brands including the online casino Jackpotjoy, as well as a string of US casinos and resorts. It also has a casino in Newcastle.