LONDON - Sky (SKYB.L) withdrew its recommendation of Rupert Murdoch's contested bid for the European pay-TV group after rival Comcast (CMCSA.O) submitted a higher, 22 billion-pound (US$31 billion) cash offer on Wednesday.

UK-based Sky, with more than 20 million customers for its sports, entertainment and news channels across Europe, is at the center of a three-way battle for control between Murdoch's Twenty-First Century Fox (FOXA.O), Walt Disney (DIS.N) and Comcast and their veteran bosses.

Sky's independent directors said they welcomed Comcast's 12.50 pound per share bid and would now engage with both Comcast and Fox. They cautioned that neither bid could yet be put to shareholders and advised them to take no action for now.

Fox first announced its 10.75 pound per share offer in December 2016 but the deal has been held up concerns about the influence Murdoch could wield over public opinion through owning all of the broadcaster as well a clutch of UK newspapers.

The proposed combination has been further complicated by Fox's agreement to sell many of its TV and film assets to Disney, including its 39 per cent stake in Sky.

On Wednesday, Sky said it welcomed Comcast's firm intention to bid for it, as well as commitments the U.S. cable giant had made to address potential public-interest concerns over Sky News, its influential 24-hour news channel.

"As a result of the announcement of this higher cash offer, the Independent Committee is withdrawing its recommendation of the offer announced by 21CF on 15 December 2016 and is now terminating the co-operation agreement entered into with 21CF on the same date," Sky said in a statement.

Sky shares rose 4.1 per cent to 13.62 pounds by 1107 GMT - well above the offer price, implying that some shareholders anticipated a bidding war.

Fox said it remained committed to its cash offer for Sky and was considering its options.

Hedge fund Elliott has taken a stake of almost 3 per cent in Sky, according to its latest filing, and other shareholders have argued that Disney's US$52 billion agreement to buy Fox implies a higher value for Sky.

Comcast said it was "delighted" to be formalizing its bid for Sky, for which it had secured a bridge loan of up to 16 billion pounds and a term loan credit agreement of up to 7 billion pounds.

"We have long believed Sky is an outstanding company and a great fit with Comcast," Chief Executive Brian Roberts said in a statement. "Sky will be our platform for growth across Europe."