News Corp, owned by embattled media baron Rupert Murdoch, yesterday offered to pay A$2 billion ($2 billion) in cash for Australia's Consolidated Media Holdings Ltd, a stakeholder in Foxtel and Fox Sports.

Telstra Corp holds 50 per cent in pay-TV network Foxtel, while News Corp and ConsMedia hold 25 per cent each, and Fox Sports is a 50:50 partnership between News Corp and ConsMedia.

The ConsMedia deal would give News Corp a 50-per cent stake in Foxtel and full ownership of the Fox Sports business in Australia with broadcast rights to the most popular football games.

Billionaire James Packer, who owns 50 per cent of ConsMedia has backed the A$3.50 a share offer from News Corp's Australian unit News Ltd.

Packer, executive chairman of ConsMedia, said that the company welcomes News' proposal and looks forward to both working together to address the detailed terms and conditions.

Packer's backing for the acquisition is conditional on no better offer being received. Billionaire Kerry Stokes' Seven Group Holdings is the second-largest shareholder in ConsMedia behind Packer, with a 24-per cent stake.

Packer, who has stakes in casinos in Australia, London, Macau and Las Vegas, is looking to divest media assets in order to expand his gaming empire as he seeks to increase his stake in Australian casino operator Echo Entertainment Group.

Telstra Corp, the half owner of Foxtel was initially keen on buying Packer's stake, but dropped the plan after the Australian Competition and Consumer Commission suggested that the purchase would not get regulatory approval.

Kerry Stokes, also the owner of the Seven Television Network, and the only other potential suitor for ConsMmedia, said that it would review News Ltd's proposal and consider its options.

Stokes could either launch a counter bid or hold on to his stake in ConsMmedia, which would not give complete control of the company to News Corp, according to analysts.