Tycoon James Packer's majority-owned Consolidated Media Holdings on Friday said it had received a formal US$2 billion takeover offer from Rupert Murdoch's News Limited.
News Limited offered Aus$3.45 a share for the media investment company, which is focused on subscription television.
This is less than the Aus$3.50 non-binding cash offer it made in June and values the firm at Aus$1.94 billion (US$2 billion).
If successful, News Limited would emerge with 50 percent control of Foxtel, the country's biggest pay TV operator, and all of Fox Sports. Telecommunications giant Telstra holds the other half of Foxtel.
Packer, Consolidated Media's executive chairman and its biggest shareholder with 50 percent of stock through his Consolidated Press Holdings, said directors would unanimously recommend the offer.
"In my view, this is a great outcome for (Consolidated Media) shareholders and for News, and it reflects a fair price," he said in a statement.
Consolidated Media Holdings was formed when Publishing and Broadcasting Ltd, founded by Packer's grandfather Frank and run by his father Kerry, changed its name in 2007.
The company's other major shareholder, Kerry Stokes's Seven Group, which holds 24 percent, will find out next week if it can lodge a rival offer.
Australian regulators are due to hand down their decision on his application, which reports say could be problematic given his existing television and other media interests.