Billionaire Kerry Stokes has signalled his intention to thwart Rupert Murdoch's $2 billion offer for Consolidated Media Holdings (ConsMedia).
His Seven Group Holdings is pondering increasing its 24 per cent holding in the pay-TV takeover target, with an eye to possible full control.
The Australian Competition and Consumer Commission (ACCC) said on Friday that Seven was "actively considering" increasing its stake in Consmedia and it has asked the regulator to "review a proposal for an acquisition of all of the shares in CMH (ConsMedia) that it does not already own".
The informal review of the proposal was lodged by Seven with the ACCC on Friday, inviting comments from interested parties to to be submitted to the competition regulator by July 13.
Mr Stokes, who owns the free-to-air Seven Network, is believed to want to remain involved in Pay TV, having taken the stake in ConsMedia several years ago.
Seven could not be contacted for comment on Friday evening to confirm whether it would take the proposal further. If it did, it would involve a full-scale takeover that would be pitted against Mr Murdoch's News Corporation that on Wednesday offered $3.50 a share for ConsMedia.
The James Packer-controlled ConsMedia owns 25 per cent of pay TV service Foxtel and 50 per cent of Fox Sports.
Analysts believe that after exiting ConsMedia, Mr Packer would use the cash to pursue rival casino operator Echo Entertainment Group or other gambling opportunities.
Seven's and ConsMedia's shares fell on Friday by 0.5 per cent to $2.04 and 0.9 per cent to $3.37 respectively, while News Corp was 14 cents stronger at $20.33.