A bidding war is raging between Disney and Comcast over who will buy 21st Century Fox.

Disney has offered $97 billion ($US71.3 billion) for the majority of Fox's film and television assets — beating Comcast's previous offer of $88 billion ($US65 billion).

Disney’s new cash-or-stock deal is expected to have caught the attention of Fox's largest shareholder, Rupert Murdoch.

With the Murdoch family holding 17 per cent of voting shares, Disney’s offer is considered superior as it could help the family avoid a large capital gains tax bill under Comcast's all-cash offer.

The bid raises the bar for Comcast, which must now decide whether it can counter with a higher bid.

Fox's board of directors said Disney's offer would see the creation of “one of the greatest, most innovative companies in the world”.

Disney and Comcast are both looking to bolster their entertainment businesses to compete with fast-growing digital rivals Netflix and Amazon.