Sky takeover fight to be settled by rare auction

(Reuters) - Britain's takeover regulator has taken the rare step of settling the battle for European broadcaster Sky Plc through an auction procedure after competing bids from Comcast and Twenty-First Century Fox remained in place.

The Takeover Panel said the auction would start, assuming that a competitive situation continues to exist, at 1700 London time on Friday and end on the evening of Saturday, with a maximum of three rounds.

Sky is at centre of a bidding battle between Rupert Murdoch's Fox, which already owns 39 percent of it, and U.S. cable giant Comcast.

Comcast currently leads Fox in the fight with a 14.75 pound a share offer that values the broadcaster at 25.9 billion pounds ($34.2 billion) and has been recommended by the pay-television group's independent directors.

That trumped the 14 pound a share offer made by Fox earlier in July for the 61 percent of Sky it does not already own, and is 37 percent above Fox's original 10.75 pound a share bid.

Walt Disney has also agreed a separate deal to buy TV and film assets from Fox, including its Sky shareholding, for about $71 billion.

"In order to provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5, the panel executive has, after discussions with the parties, established an auction procedure," the regulator said in a statement.

In the first round of the auction, the offeror with the lowest offer at the start of the process can may make a higher bid and the other suitor can do so in the next round. If the auction goes on, both offerors may make an increased bid.

($1 = 0.7569 pounds)

(Reporting by Noor Zainab Hussain in Bengaluru; editing by Jason Neely/Keith Weir)