LONDON (Reuters) - Bid target Sportingbet highlighted growth in its market leading Australian gambling business on Wednesday, the main attraction for suitor William Hill, Britain's largest bookmaker.

The online gambling company said earlier this week that a 350-million-pound ($564.8 million) takeover approach at 52.5 pence per share from William Hill and smaller online betting firm GVC, undervalued the business.

William Hill, which makes most of its money in Britain, is expanding overseas and is interested in Sportingbet's operations in Australia and Spain.

Sportingbet declined to comment further on the bid situation, citing takeover panel rules. The potential bidders have until Oct 16 to make a firm offer.

Shares fell 3.3 percent to 51.25 pence by 0845 GMT, indicating doubts about whether a significantly higher bid would emerge.

Underlying earnings -- expressed as EBITDA -- rose 11 percent to 56.8 million pounds on revenues of 188.9 million pounds. However, the company posted an operating loss of 39.1 million pounds once a slew of one-off charges were included.

Chief Executive Andrew McIver said the company had emerged from a year of transition in a stronger position, with its focus on countries where the regulatory framework for the growing online gaming sector was clear.

It cemented its position in Australia in 2011 by taking over Centrebet, the number four operator in the market. A company backed by GVC bought its Turkish language website.

"Our successful acquisition of Centrebet, which has out-performed our expectations, disposal of Turkey and introduction of regulation in our other key countries has resulted in over 80 percent of the group's revenue now being derived from regulated and/or taxed countries," McIver said.

Sportingbet said Australia now accounted for approaching 70 percent of group revenues and almost all of the company's profits.

Sums wagered on Australian sports betting rose 82 percent to 1.493 billion pounds, while annual savings after the acquisition increased to 15 million pounds from an original estimate of 5.2 million pounds.

Analyst Ivor Jones of Numis, who rates the stock a "buy", said shareholders should be encouraged by the Sportingbet statement.

"The Australian business, over ten years in the making, is profitably growing share in a growing market," he said.

"In Spain, Greece and other European markets recession, regulation and taxation have conspired to sharply reduce profits, but strong market positions remain along with the potential to follow Australia's path to post-regulation success."

($1 = 0.6196 British pounds)

• Please wait.

• South Korea in seventh heaven
• F1 is a superego trip for Wurz's wife
• Make betting legal, says top Indian body
• NBA: Pacers edge Heat to even series
• Arat: Istanbul bid to host the 2020 Olympic is about building bridges
• Golf: Two share lead at inaugural rain-hit Pure Silk LPGA
• Golf: Kuchar leads weather-hit Colonial
• Kuchar one ahead at weather-hit Colonial
• Woods heads potent field for next week's Memorial
• Squash: Matthew offers a message with a warning