U.S. media group Comcast submitted a 22 billion pound ($30.7 billion) bid for Sky on Wednesday, prompting the European pay TV group to drop 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 deal has been held up by concerns about the influence 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.
On Wednesday, Sky also welcomed commitments the U.S. cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel.
"As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 and is now terminating the co-operation agreement entered into with 21CF on the same date," Sky said in a statement.
PJT Partners is the lead advisor for Sky.