21st Century Fox said Wednesday that it has reached a new deal to buy Sky that values the UK broadcaster around £24.5 billion ($32.5 billion).
Rupert Murdoch's Fox (FOX) is in a bidding war for Sky with Comcast (CCZ), which launched an offer for the UK company in April. The contest is part of a wider fight between Disney (DIS) and Comcast to take over a large chunk of Fox.
Fox's new bid for Sky (SKYAY) of £14 ($18.60) per share is 12% higher than Comcast's. It's also a 30% increase on Fox's original bid in December 2016.
Sky said in a statement that it would recommend shareholders accept the sweetened offer.
Fox, which already owns about 39% of Sky, has been navigating a lengthy process to secure approval from British media regulators for its bid — and that saga isn't quite over.
It's still awaiting final green light from the British government, which is expected to come this week.
Last month, UK government officials said the deal can proceed if Fox sells Sky News to an appropriate third party. Regulators are concerned that Fox's ownership of Sky News would give Murdoch and his family too much influence over UK media.
Fox has said it is willing sell Sky News to get the deal done, but its plans could still be thwarted if Comcast comes back with an even bigger bid for Sky.
Shares in Sky were trading around £14.80 ($19.65) on Wednesday morning in London, suggesting investors are hoping for a higher offer.
Sky is an attractive asset to US media companies that are looking to expand their operations to Europe and to compete with upstarts like Netflix (NFLX) and Amazon (AMZN). It's a leader in pay TV in the United Kingdom and other markets including Germany and Italy. It also sells broadband and mobile phone services.
The broadcaster has become a pawn in a much larger struggle between Comcast and Disney, which are locked in a bidding war for most of Fox, including its existing stake in Sky.
Disney appears best positioned to win that tussle, for now.
Comcast has yet to counter Disney's $71 billion bid for Fox that was announced last month.
-- Hadas Gold contributed to this report.
