Sky shares rose 3.9 percent to 13.59 pounds as investors bet Fox would sweeten its bid, and Sky withdrew its recommendation that shareholders accept the Fox offer.
"We are delighted to be formalizing our offer for Sky today", said Chairman and CEO Brian Roberts.
U.S. cable operator Comcast has made a formal £22bn bid for Sky, the owner of Sky News, in a move expected to stoke a bidding war for the United Kingdom company.
Sky's independent directors welcomed Comcast's 12.50 pound per share bid and said they would now engage with both Comcast and Fox.
Shares of Comcast went up by almost 3% on Wednesday already reaching a high of $34.78 after closing on Tuesday at $33.35. Comcast's offer comes just days before the May 1 deadline for the Competition and Markets Authority to give its final advice about the Fox bid to Culture Secretary Matt Hancock.
He added: "We also understand the role that Sky plays in United Kingdom society and in its customers' lives and we are determined to be responsible and trusted owners of Sky". Comcast's superior cash proposal implies an equity value of $31bn (£22bn) for Sky.
Sky is a leading consumer entertainment company in Europe, providing entertainment and communications services primarily in the UK, Germany and Italy.
Comcast announced its intention to launch a bid in February, gatecrashing 21st Century Fox's longstanding deal to secure the 61 per cent of Sky that it does not already own.
But British regulators aren't so keen on allowing Murdoch to buy the company, which would give him too much control of the United Kingdom media and is therefore "not in the public interest", the Competition and Markets Authority said earlier this year. Generously add those to consensus estimates for Sky's operating profit in 2020, tax the lot at 18 percent, and the return on invested capital is nearly 7 percent. Sky is arguably the most equivalent company to Comcast outside of the US. Sky has a strong business, excellent customer loyalty, and a valued brand.
"The rights may come with multibillion-pound price tags, but Sky has proven the Premier League deals are well worth the outlay".
It said Sky would "co-operate fully" with both parties but also welcomed Comcast's bid, saying it believed its voluntary commitments to the company under the offer "should comprehensively address any potential public interest concerns".
The bid is yet to be given the backing of the Sky board, which is being advised by PJT Partners, Morgan Stanley and Barclays, but Comcast said it was in talks with the Sky Independent Committee "with a view to obtaining a future recommendation of the acquisition".
Comcast, which owns cable channels MSNBC and CNBC, argues its approach would escape concerns over media plurality because of its "minimal presence" in United Kingdom media.