News Corporation, the media group headed by Rupert Murdoch, confirmed this morning that it had made an offer to take full control of BSkyB, the satellite broadcaster in which it has a 39 per cent stake.

News Corp, parent company of The Times, has offered 700p a share for the remaining 61 per cent that values the company at about £12.25 billion. The offer, like an earlier offer of 675p a share, was rejected by BSkyB’s independent directors, who claimed the terms “undervalue significantly” the company.

However, the BSkyB statement notes that the independent directors, advised by Morgan Stanley and UBS, “would have been prepared to support a proposal in excess of 800p per share” subject to the necessary regulatory approvals.

The statement added: “Recognising that an offer from News Corp could be in the interests of BSkyB shareholders in the future, and that obtaining any necessary merger clearances would facilitate such an offer, BSkyB has agreed to co-operate with News Corp in seeking those clearances from the relevant authorities.”

Under the agreement, BSkyB has agreed not to issue a “put up or shut” notice to the Takeover Panel.

Shares in BSkyB jumped 20 per or 120.5p to 721p this morning amid market expectations that News Corp would raise its offer.

Meanwhile, News Corp, advised by Deutsche Bank and JPMorgan Cazenove, has agreed to reimburse BSkyB up to £20 million in costs if regulatory clearance is not secured or £38.5 million if it obtains clearance but does not go ahead with a bid.

Nicholas Ferguson, the senior independent non-executive director at BSkyB, will become deputy chairman and lead the committee set up to consider any offer from News Corp.

This avoids any conflict of interest for James Murdoch, Mr Murodoch’s son, who is both chairman of BSkyB and executive chairman and chief executive, Europe and Asia, at News Corp.

Chase Carey, deputy chairman, president and chief operating officer at News Corp, said: “We believe that this is the right time for BSkyB to become a wholly owned part of News Corporation with its greater scale and broader geographic reach. For News Corporation, our proposal presents an opportunity to consolidate a core business with which we have been closely associated for over two decades.”

Analysts have said that News Corp may want to increase its holding in BSkyB to take advantage of the heavy investment the company has made in recent years on broadband and high-definition television. Given the potential returns from this investment, many analysts believe that BSkyB is undervalued.

However, some observers had been sceptical about the long-running rumours, questioning whether News Corp would want to spend billions to increase its stake in a company it already effectively controls.

Analysts believe News Corp could comfortably finance the £7.8 billion cost of the offer, excluding debt, and might be seeking to take advantage of the relative strength of the dollar.

BSkyB was formed in 1990 from the merger of British Satellite Broadcasting and Mr Murdoch’s Sky. It is now the largest digital pay-TV platform in Britain reaching a third of all homes and with 9.8 million subscribers in April. It is planning to launch a 3D TV service together with a video-on-demand offering to residential customers later this year.

Analysts have speculated that News Corp may want to combine BSkyB with some of its other satellite television interests which include the wholly owned Sky Italia and holdings in Sky Deutschland and Tata Sky in Asia.

Earlier this year, BSkyB lost a long-running legal battle to retain all its 17.9 per cent stake in ITV and sold a 10.4 per cent holding.

Last week, BSkyB bought Virgin Media’s subscription television channels, including Living, Bravo and Challenge, for £160 million.