Broadcaster Sky has announced it in takeover negotiations with 21st Century Fox after receiving a tabled approach worth around £18bn from the US media giant founded by Rupert Murdoch.

Sky plc said the two companies had reached an agreement on an offer price of £10.75 per share but other terms remained under discussion.

The company issued a statement after shares in Sky rose 32% to 1040 amid rumours of takeover interest from Fox, which is already Sky's majority shareholder.

The FTSE 100 firm said in a stock market announcement there was no certainty that an official offer will be made.

21st Century Fox, which currently owns 39.1% of Sky, tabled a proposed offer representing a 40% premium of Sky's share price of 759.4p on Tuesday.

Sky said it has formed an independent committee to consider the proposal as it looks to protect the interest of shareholders.

The broadcaster announced in October that sales rose 5% in the first quarter, driven by growth in Germany and Austria, while UK revenues grew 5% to £2.1 billion.