Fox currently owns a 39% stake in the pay TV company which operates in the UK, Ireland, Germany, Austria, and Italy.
“Sky has received an approach from 21st Century Fox,” it said.
“After a period of negotiation, the independent directors of Sky and 21st Century Fox have reached agreement on an offer price of £10.75 per share in cash, less the value of any dividends subsequently paid by Sky.
However, certain material offer terms remain under discussion, and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.
It added: “The independent directors, who have received financial advice from Morgan Stanley, PJT Partners, and Barclays, have indicated to 21st Century Fox that they are willing to recommend the proposal to Sky shareholders, subject to reaching agreement on the other terms.”
The proposal represents a premium of 40% to the closing price last Tuesday, the firm said, that date “being the last business day prior to the initial proposal being received from 21st Century Fox”.
Sky has formed an independent committee of the board to consider the terms of the offer.
“Discussions are continuing and a further announcement will be made in due course as appropriate,” stated Sky.
In 2011, what was then known as News Corp before it split into Fox and News Corp, withdrew a bid for full control of Sky amid the phone-hacking scandal at the company’s UK newspaper unit.
“We do not think there would be any... political or regulatory issues” for the deal, said Liberum Capital analyst Ian Whittaker.
“The UK government is keen to promote investment in the UK post-the Brexit vote. “We doubt therefore it would want to veto what could be viewed as a major sign of confidence in the UK market.”
He added: “The furore over phone hacking has died down, and the government is now a majority Conservative one, not a Conservative-Liberal Democrat coalition” as at the the time of the 2011 bid.
Fox CEO James Murdoch said this week that he had nothing new to say about the topic.
“The Sky business is a great business,” he said. “At this point, we haven’t made any decision.”