By Ben Martin
LONDON (Reuters) - Hedge fund manager Crispin Odey is considering withdrawing his support for Twenty-First Century Fox's <FOXA.O> attempt to take over Sky <SKYB.L>, saying the 11.7 billion-pound ($15.20 billion) offer undervalues the British pay TV broadcaster.
Odey, who is the 15th biggest Sky shareholder with a 1 percent stake, told Reuters in a telephone interview that regulatory delays have caused him to reconsider his support for Fox's 10.75 pound-a-share offer for the 61 percent of Sky it does not already own.
His comments mark a reversal of his position since the deal was announced in December when he said he would back the offer.
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His change of stance comes after Rupert Murdoch's attempt to take full control of Sky faced a further delay after the British government's Department for Digital, Culture, Media and Sport said on Tuesday it had asked communications regulator Ofcom to re-examine the deal.
"The truth is, the longer this goes on the more that I would be quite happy if it failed," Odey said, adding that Fox is "getting it at what now looks like quite a cheap price" and that the offer is "now starting to look rather mean."
Odey said his view of the deal was changing because he thought Sky's prospects were improving.
The investor clashed with Sky three years ago when he initially rejected its offer to acquire his fund's shares in Sky Deutschland in the course of taking over the German business.
Sky shares fell on Tuesday following the announcement that Ofcom had been asked to do more analysis on the deal.
The stock closed down 0.8 percent on Wednesday at 953.5 pence, the lowest level since December when news of the deal broke.
A spokesman at Sky declined to comment.
A source close to Sky said that at the current share price, Fox's offer remained competitive. However, he acknowledged that the longer the deal takes the higher the risk is that investors may change their views on the valuation.
The government's request to Ofcom came amid criticism from politicians worried about the U.S. company's broadcasting standards, in the wake of recent allegations about a controversial Fox News story.
The culture department said it had "asked Ofcom to advise on a number of points" and that the regulator had until August 25 to respond.
That pushes back a final decision by the government on whether the Sky takeover should be referred to the Competition and Markets Authority for a further review.
Murdoch has long sought to take full control of Sky but has faced political opposition.
His previous attempt to take over the broadcaster was abandoned in 2011 when his British newspaper business was embroiled in a phone-hacking scandal.
(Additional reporting by Paul Sandle and Sophie Sassard; Editing by Adrian Croft, Greg Mahlich)