MONTREAL - The largest shareholder of British betting company William Hill is balking at a possible merger with Montreal-based online gaming firm Amaya.

Parvus Asset Management, which owns 14.3 per cent of William Hill, wrote a letter to the board dated Thursday opposing a potential agreement.

"We strongly believe the proposed takeover has limited strategic logic and would destroy shareholder value," said the missive from Parvus co-founders Mads Eg Gensmann and Edoardo Mercadante.

They said Parvus Asset Management would actively oppose the merger if a formal proposal is presented.

Amaya and William Hill last Friday announced they were in discussions regarding a potential merger, adding that there is no certainty that an agreement will be reached.

Amaya (TSX:AYA) said it has been reviewing its strategic alternatives since February.

A spokesman for William Hill wrote in an email Thursday that it is fully assessing the deal given the "strategic fit, diversification and potential synergies," but it would be premature to draw conclusions while work is ongoing.

"The board would not come forward with a transaction unless it was satisfied that it was in the interests of all shareholders," William Hill said.

Amaya spokesman Eric Hollreiser said the Parvus letter contained inaccuracies about the "high-quality, consistent profitability and stable growth prospects of our business."

"Further comment on any potential agreement is best provided if there is a proposed transaction put forward by Amaya's board," he wrote in an email.

Analyst Maher Yaghi of Desjardins Capital Markets has said there is a possibility that other bidders may surface who are willing to pay more than William Hill.

He said the size of a transaction, Amaya's high debt and limited ability for them to find large savings make it difficult for private equity players to outbid. Large gaming company GVC Holdings PLC could be looking at Amaya, but it bought BWIN in February for US$1.7 billion.

A spokesman for former Amaya CEO David Baazov has refused to comment on published reports that he has withdrawn his interest in taking the company private as he focuses on insider trading charges levelled by Quebec's securities regulator.

Follow @RossMarowits on Twitter.

Note to readers: This is a corrected story. A previous version said Parvus Asset Management owned nearly 15 per cent of William Hill.

News from © The Canadian Press, 2016