Cable company Comcast has submitted a 22 billion pound or $30.7 billion bid for European pay TV group Sky on Wednesday.
As a result, the pay TV group dropped its support for a lower offer from Rupert Murdoch’s Twenty-First Century Fox.
Sky’s independent directors welcomed Comcast’s 12.50 pound per share bid and said they would now engage with both Comcast and Fox. They cautioned that neither bid could yet be put to shareholders and advised them to take no action for now.
The bid formalizes an offer first made in February and puts pressure on Fox, which already has a 39-percent stake in Sky, to raise the 10.75 pound per share cash offer it first announced in December 2016. It said on Wednesday it remained committed to its offer and was considering its options.
The Fox-Sky deal has been held up by concerns about the influence Rupert Murdoch could wield over public opinion through owning all of the broadcaster as well as British newspapers including The Times and The Sun.
The proposed combination has been further complicated by Fox’s agreement to sell many of its TV and film assets to Walt Disney, including its stake in Sky, for $52 billion, Reuters reported.
Comcast CEO Brian Roberts said Sky withdrawing its recommendation was what it wanted to achieve by formalizing its offer on Wednesday.
Sky is chaired by Murdoch’s son James, who played a key role in building the company into a major European broadcaster with operations in Germany, Austria and Italy as well as Britain.
Sky formed a committee of independent directors to consider the bids, given James Murdoch’s role as chief executive of Fox.
The most likely scenario, according to many analysts, is that Fox, with Disney’s blessing, raises its bid. Fox has to at least match Comcast’s offer, but analysts estimate a final winning bid could go as high as 14 to 15 pounds per share.
Philadelphia-based Comcast is the biggest U.S. cable operator, owning broadcasters NBC, CNBC and MSNBC. It also owns movie studio Universal Pictures.