Bluebet Holdings Ltd (ASX: BBT) shares are having a day to remember on Friday.
At the time of writing, the ASX stock is up 24% to 24.1 cents.
Why is this ASX stock jumping?
Investors have been scrambling to buy the sports betting company's shares today amid rumours of a potential merger with one of its rivals.
According to the AFR, BlueBet and BetR are in talks about a potential merger of their betting operations in an attempt to build scale ahead of likely regulatory headwinds.
Sources told the media outlet that Matthew Tripp's BetR was wanting to launch a takeover of BlueBet, but the Michael Sullivan-led BlueBet business prefers a merger.
Though, it remains unknown whether a merger would take BlueBet private or lead to BetR joining the ASX boards.
BlueBet response
The ASX stock has responded to the speculation and revealed that discussions have been happening with BetR and other parties.
However, it has warned that there's no guarantee that anything will materialise from these talks. Its response states:
BlueBet is regularly involved in discussions with third parties regarding strategic initiatives, including Betr, aimed at maximising value for its shareholders. While discussions may occur, there can be no certainty that any transaction will eventuate. BlueBet will continue to update the market in accordance with its continuous disclosure obligations.
BlueBet shares have been hugely disappointing performers since their IPO in 2021.
The ASX stock listed at $1.14 per share with a market capitalisation of $228.1 million. Even after today's strong gain its shares are still trading approximately 79% lower than this and with a market capitalisation of just $47 million.
