London-based pay TV operator Sky says it is withdrawing its recommendation to shareholders to accept 21st Century Fox's bid in a move that came after Comcast made a better offer.
US cable company Comcast Corp submitted a $31-billion (22-billion pound) offer for UK-based pay-TV group Sky on Wednesday, challenging an already agreed but lower takeover bid from Rupert Murdoch's Fox.
Sky, with more than 20 million customers for its sports, entertainment and news channels across Europe, is at the centre of a three-way battle for control between Murdoch's Twenty-First Century Fox, Walt Disney and Comcast and their veteran bosses.
Sky's independent directors said they welcomed Comcast's $17.4 (12.50 pound) per share bid and 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.
Fox first announced its $14.98 (10.75 pound) per share offer in December 2016 but the deal has been held up concerns about the influence Murdoch could wield over public opinion through owning all of the broadcasters as well a clutch of UK newspapers.
The proposed combination has been further complicated by Fox's agreement to sell many of its TV and film assets to Disney, including its 39 percent stake in Sky.
Fox said it remained committed to its recommended cash offer for Sky announced on December 2016, and was currently considering its options.
"A further announcement will be made in due course," it said.
Comcast, the owner of NBC and Universal Pictures, said it was delighted to be formalising its offer.
"We have long believed Sky is an outstanding company and a great fit with Comcast," said Chairman and Chief Executive Brian L Roberts.
"Sky has a strong business, excellent customer loyalty, and a valued brand."
Shares in Sky were trading up 3 percent at 13.46 pounds at 1026 GMT.