The British broadcaster Sky will be auctioned off this Saturday in a dramatic end to a two-year £26bn takeover battle that has pitted Rupert Murdoch’s 21st Century Fox against the US media company Comcast.

The Takeover Panel, which regulates bids for British listed companies, has ordered a rare auction that will allow Fox and Comcast to make new bids for the broadcaster. Both companies have made already offers for Sky but so far neither has declared it will not go higher, prompting the highly unusual showdown. A statement on the final bids is expected on Saturday evening, with the eventual winner due to be confirmed by 7am next Monday before the markets open.

To confuse matters further, Fox is the subject of a takeover bid by Disney, which is backing Murdoch’s bid to buy Sky as part of a global round of media takeovers.

“Having three of the world’s best and largest media companies seeking to own Sky is a major and positive endorsement of our strategy and the execution of our plans,” the Sky chief executive, Jeremy Darroch, said in an email to staff.

“A process like the one announced today doesn’t happen very often and is therefore likely to generate coverage and speculation in the media over the coming days. It is also likely to wrap up sometime over the weekend or early Monday morning and could therefore be outside of normal business hours.”

The battle for Sky kicked off on 15 December 2016, when Murdoch’s Fox offered £10.75 for every share that Fox did not already own, prompting an investigation into whether the media magnate should be allowed to take full control.

Murdoch already has a 39% stake in the business and looked to set to make good on his long-term goal to take full control of the highly profitable company he founded in the late 1980s. His previous attempt to take full control of the company was derailed in 2011 by the phone-hacking scandal at his newspapers.

However, in February, Comcast tried to gatecrash Murdoch’s plans, offering £12.50 a share, with the battle intensifying over the summer.

Rupert Murdoch must make £26bn-plus Sky bid to thwart Comcast Read more

The Takeover Panel has decided the battle must be brought to an end and has set up an auction “to provide an orderly framework for the resolution of this competitive situation”.

Auctions of this sort are very rare. There will be a maximum of three rounds of bids and all must be cash-only offers. The lowest bidder – currently Fox – will go first with a fresh offer, followed by the rival bidder, which is currently Comcast.

The auction can then progress to a third round, where Fox and Comcast can submit new offers. However, if only one party puts in a third-round bid it will not be binding.

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The panel will then make an announcement on the outcome of the high-stakes contest on Saturday night, which must be confirmed by the winning bidder before markets open on Monday.

Neither Fox nor Comcast will be allowed to raise its bid again – unless a new purchaser emerges at the last minute once the auction is complete. Fox, Comcast, Disney, and Sky have all agreed to the process.

Sky shares were changing hands at £15.79 on Thursday, valuing the company at £27.1bn, and suggesting the City expects the auction to push up the value of the company even further. Murdoch’s original bid, which was recommended by the broadcaster’s directors, valued the business at about £18bn.