"The independent committee of Sky welcomes today's announcement by Comcast of its firm intention to make a £12.50 per share pre-conditional cash offer for Sky, which follows its initial possible offer announcement on 27 February", said the Sky announcement.
Comcast formalized its offer through what is known as a Rule 2.7 announcement in which it said it was committed to preserving Sky's editorial independence and would not acquire a majority interest in any United Kingdom newspaper for five years "to ensure media plurality is sustained".
Comcast, the owner of NBC and Universal Pictures, said it was delighted to be formalising its offer.
Comcast's bid is expected to generate "synergy savings" of around US$500m and would come with an undertaking to protect the independence of the UK-based pay TV operator's Sky News channel for a decade.
Shares of Sky have gone up by almost 4% to approximately $1359.00, while shares of 21st Century Fox have only risen by about 2%, to almost $36.20. The contest pits Iger against Comcast CEO Brian Roberts, after Disney won over Comcast in an earlier battle for Fox.
Although this may have started a bidding war, Sky was quick to respond to the announcement of Comcast's offer. The offer also establishes Comcast's intent to maintain Sky's United Kingdom headquarters at its Osterly campus.
Sky's independent board members are withdrawing their recommendation of the 21st Century Fox bid.
Following the Comcast bid, Sky said it is withdrawing its recommendation for the Fox bid.
Comcast's $31 billion offer for United Kingdom satellite broadcaster Sky just about passes financial muster.
"We think Sky is an outstanding company".
Hedge fund Elliott has taken a stake of nearly 3 percent in Sky, according to its latest filing, and other shareholders have argued that Disney's $52 billion agreement to buy Fox implies a higher value for Sky.
There was also a commitment not to secure any United Kingdom newspaper ownership for at least five years.
The bid, which will be financed by additional debt, is subject to regulatory approval and the support of over 50% of the voting rights of Sky shareholders. Sky has a strong business, excellent customer loyalty, and a valued brand.
Rupert Murdoch's interest in Sky is intertwined with a deal he has done with Disney, which has agreed to buy 21CF's entertainment assets including its stake in Sky.
The Sky committee noted its duty is to maximize value for shareholders.
Fox has long owned a 39 percent stake in Sky and offered to buy the remaining 61 percent in December 2016.