William Hill has strong ambitions for the expanded business

The purchase adds an extra 624 outlets to William Hill's existing 1,600-strong shop portfolio.

The move will see it overtake Ladbrokes, which has 2,000 outlets.

William Hill's shares fell nearly 3%, or 14.5p, to 510.5 pence after analysts expressed concern that it may have overpaid for the stores.

William Hill said the takeover would enable it to expand into areas where it was unrepresented - both Northern Ireland and the Republic of Ireland.

William Hill does not expect any problems from the Office of Fair Trading, due to the highly competitive gambling market.

This acquisition represents a rare opportunity for William Hill to substantially increase its distribution reach William Hill chief executive David Harding Check William Hill's share price See Stanley Leisure's share price

William Hill added that in light of the takeover it would no longer be going ahead with a planned �453m return of capital to shareholders that it announced back in March.

Liverpool-based Stanley Leisure's shops, which are also located in Jersey and the Isle of Man, will be rebranded as William Hill.

'Attractive price'

William Hill also said the takeover would enable it to increase its presence in the north- west of England, where it is currently under-represented.

Following the purchase, William Hill will have around a quarter of all the betting shops in the UK.

"This acquisition represents a rare opportunity for William Hill to substantially increase its distribution reach, whilst simultaneously realising benefits of scale," said William Hill chief executive David Harding.

Stanley Leisure also welcomed the sale of its betting shops, describing the �504m price as "very attractive".

Its shares closed up 2.5p at 524.5 pence.

Its chief executive Bob Wiper said the firm would now renew its focus on its core gaming business - Stanley Leisure is the largest casino operator in the UK.

It has 41 casinos across Britain; four in London and 37 outside the capital.