The development was announced by the Takeover Panel, which presides over City rules governing bids for UK firms, as the clock ticks down to its deadline for American suitors 21st Century Fox and Comcast to make final offers for the UK-based home and mobile entertainment and communications company.
The panel’s ruling sets the scene for an auction that begins at 5pm on Friday and ends the next evening, as all sides involved in the process agreed to waive usual procedure for a contest over five days from Monday – the first working day after the deadline.
There can be up to three rounds of bidding during the auction on Saturday.
The panel said Fox would begin proceedings because it currently has the lowest bid on the table – at £14 per share for the 61% of Sky that it does not already own.
Comcast has previously offered £14.75 per share, valuing Sky at almost £26bn.
The panel said the winner of the auction would be announced “as soon as practicable”, admitting it could finish with revised offers from both US firms at the same price in cash.
Fox and Comcast are only allowed to make fixed-price cash bids in sterling.
Shareholders would have until 11 October to vote on the final bids.
Such a process is rare in UK merger and acquisition history – with Tata’s purchase of steelmaker Corus in 2008 one of the most well-known.
Sky shares – up almost 60% in the year to date – were trading flat on the day by Thursday lunchtime at £15.81 in anticipation of the auction process ahead.