USA cable company Comcast Corp submitted a 22 billion pound ($31 billion) offer for pay-TV group Sky (SKYB.L) on Wednesday, challenging an already agreed but lower takeover bid from Rupert Murdoch's Fox (FOXA.O).
"Comcast believes that, combined, Comcast and Sky will create a business equipped to compete more effectively in a rapidly changing and highly competitive industry", the company said in its announcement.
Murdoch's 21st Century Fox bid £10.75 per share for Sky back in 2016 but the process has been bogged down by United Kingdom regulatory concerns that have called into question the prospect of it ever succeeding.
Now, Sky's independent directors have withdrawn their support for the Fox deal, as Comcast offers a 16 percent premium above Fox, and that sets the scene for a possible bidding war.
Following the Comcast bid, Sky said it is withdrawing its recommendation for the Fox bid.
"We are delighted to be formalizing our offer for Sky today". One is its stock price, since its shares would likely be used to help pay for a major acquisition, the people familiar with the situation said.
Comcast, which owns Universal Pictures and NBC, said it had formalised its offer to coincide with its own results, giving it an opportunity to explain to investors the merits of the bid.
After announcing its intention to make a £22 billion bid for Sky PLC previous year, Comcast has now confirmed its interest in the United Kingdom media business.
In order to receive regulatory clearance, Comcast has made a range of commitments, including maintaining Sky News's annual expenditure for ten years.
Acquiring Sky would boost Comcast's ability to invest in programming, innovation and would significantly expand its global footprint, the company said.
In the continuing saga of USA media conglomerates battling over Sky of the United Kingdom, Comcast has fired the latest salvo in its hopes of gaining control of the company.
To address media plurality concerns, Fox had recently announced Disney would consider buying Sky News, even if its takeover of Fox's other assets didn't go through.
Comcast said it anticipates realizing about $500 million in operating synergies, with about $300 million on the expense side and $200 million in revenue. The company lost 96,000 video subscribers, compared with an estimate for a 60,800 drop.
Fox is now expected to up its offer to Sky.
Comcast also on-boarded 379,000 new high-speed internet customers as Comcast inexorably shifts away from TV distribution and into what it calls a "connectivity" business. Adjusted profit per share for the latest quarter was 62 cents.