Shares in Sky surged today, at one point rising 5% and topping the FTSE 100 leaderboard, after reports emerged that the Murdoch family had knocked back interest from both Vivendi and Vodafone for its 39% stake in the pan-Euro pay TV giant.

The fate of what Rupert Murdoch intends to do with his 39% stake in Sky has been up in the air ever since Sky, previously known as BSkyB, completed its acquisition of Sky Italia and majority interest in Sky Deutschland to create a European TV giant in a deal worth nearly $11 billion last November. One theory mooted at the time was the elder Murdoch would sell the stake- valued somewhere between $4-5 billion- to fund a new approach to acquire Time Warner after his initial offer was rebuffed.

Vivendi has long been viewed as a potential buyer. The French media giant is sitting on a war chest of some $15 billion after chairman Vincent Bollore has divested the company of assets such as telcos SFT and Maroc Telecom, as well as video game publisher Activision Blizzard, to focus on its core media assets Canal + and Universal Music Group.

Bollore is believed to have held informal talks with the Murdoch family in the spring to discuss the possibility of a Vivendi takeover of their share. The Murdochs, however, asked for $28 a share, repping a 70% premium on Fox’s 39% stake. That was significantly higher than Vivendi’s own estimates plus Deadline understands that Bollore’s short term priority is to consolidate the group’s control over Telecom Italia, where Vivendi is looking to increase its 8.3% stake to closer to 15% before the onset of the European summer holidays. Whether Bollore then chooses to explore a content partnership with Silvio Berlusconi’s Mediaset and Mediaset Pay platform, or go back to discuss the bigger play with the Murdochs, will become clearer post the Telecom Italia dust settling.

As for Vodafone, their Sky play may have more than a little to do with their being a takeover target themselves from John Malone’s Liberty Global PLC. Earlier this month, the two companies confirmed they were holding talks over asset sharing between the two companies. There has been chatter for months that Malone was eyeing Vodafone to further consolidate his European and international expansion. Speaking in May, Malone called Vodafone “a great fit” with his growing European cable empire, specifically citing the benefits of a merger in markets such as the UK, Germany and the Netherlands. That led to Vodafone enjoying its highest share price in over a year. While Vodafone reps stressed that it was not in talks over a full merger with Liberty Global, commentators are convinced that Malone- whose Charter Communications is acquiring Time Warner Cable in the U.S.- is interested in taking over the company completely. Liberty Global is the largest cable company in the world, with 27 million customers across 14 countries. Assets include Virgin Media, Unity Media and Ziggo. The company is looking to diversify its offering by owning more wireless assets so it can get into the quad play business: offering TV, landline phone, broadband Internet and wireless service. Any Vodafone-Sky deal would give the telco a strong content-offering platform in that context, which would dramatically increase its value ahead of any potential decisive Malone move.

Across Europe a wave of telco consolidation is taking place, which will have long-term and strategic ramifications on the media and content business. The likes of Telefonica, Vivendi and Telecom Italia have all been engaging in asset divestment or acquisition in recent months as the digital landscape continues to take shape. The entry by deep pocketed telcos into the content business, not to mention the arrival of SVOD disrupter Netflix into Europe, has already had an impact on more traditional media giants.

One other option also remains the possibility of the Murdoch family themselves, through Fox, looking to complete a full takeover of Sky. Those plans were originally scuppered in 2011 following the hacking scandal, which engulfed News Corp at the time and made their move politically unpalatable. Now, however, with a potentially more sympathetic Conservative government majority in place, and the elevation of James Murdoch – former Sky chief exec and chairman- to Fox chief exec, a Fox takeover may be back on the table.