London (AFP) - Britain gave the edge Tuesday to US cable giant Comcast in a multi-billion-pound takeover battle with Rupert Murdoch's entertainment titan 21st Century Fox for pan-European TV group Sky.
Culture Secretary Matt Hancock announced that he has cleared Comcast's £22-billion ($29.4-billion, 25.1-billion-euro) bid for all of Sky, setting the stage for a potential bidding war.
Sky, which is best known for its live coverage of English Premier League football, has long been a jewel in the crown of media magnate Murdoch.
"I have concluded that the proposed merger does not raise public interest concerns and so I can confirm today that I will not be issuing an intervention notice," Conservative Party minister Hancock told parliament.
However, turning to Fox's lower offer per share for the 61 percent of Sky it does not already own, Hancock added he favoured "divesting Sky News" to a suitable third party to address public interest concerns identified by regulators, before giving it the nod.
Fox is seeking to buy the 61 percent of Sky that it does not own for £11.4 billion but the long-running saga has been plagued by fears over media plurality and broadcasting standards -- and the increasing influence of Australian-born US citizen Murdoch.
- 'Bidding war on horizon' -
Deputy leader of the main opposition Labour party, Tom Watson, who is a vocal critic of Murdoch, urged Hancock to "protect the interests of the public".
He said: "With Comcast now in the ring, the future for Sky is uncertain. A bidding war is on the horizon."
New York-listed Fox had already proposed in April to sell rolling TV news channel Sky News to Disney to finally clinch its takeover of Sky.
Comcast, which itself had lost out to Disney last year in an effort to buy 21st Century Fox, had last month formalised its Sky cash bid.
Hancock made his announcement in light of a final report from Britain's Competition and Markets Authority (CMA).
The regulator again raised the possibility of "increased influence of the Murdoch Family Trust over public opinion and the UK's political agenda", should Fox win control of Sky News.
"The CMA concluded in line with its interim findings that the merger may not be expected to operate against the public interest on the grounds of a genuine commitment to broadcasting standards," Hancock said.
He added: "I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified."
- Consultation period -
There will now be a 15-day consultation period to finalise details of the Sky News divestment before Hancock reaches his final decision on the Fox deal.
However, he also warned that -- should a Sky News sale not be attainable -- then his "only effective remedy would be to block the merger altogether".
Earlier this year, the CMA had provisionally ruled that Murdoch's planned takeover was not in the public interest on media plurality concerns.
Murdoch owns also major British newspaper titles The Times and The Sun.
Comcast's superior cash offer values each Sky share at £12.50, which is significantly higher to Fox's offer price of £10.75.
Back in 2011, Murdoch failed to buy the British pay-TV group, then known as BSkyB, owing to a phone-hacking scandal at his now-defunct News of the World tabloid newspaper.