Gresham Hotel Group has written to the Takeover Panel asking it to investigate the sale of 3.6 million Gresham shares on Tuesday. The shares are believed to have been bought by Hong Kong-based businessman Mr Chanrai Balram. Una McCaffrey reports.

No disclosure to this effect has been made, however, even though Takeover Panel rules require any party who buys or sells more than 1 per cent of a takeover target to declare their interest.

A letter sent by Gresham's advisers to the Takeover Panel yesterday is believed to include a formal request for an investigation into the share trade.

A similar request is expected to issue from Precinct, the consortium of three investors that has made offers for Gresham.

Advisers to Precinct are believed to be conducting their own research into the matter as the first deadline for acceptances of the offers approaches.

Precinct has offered to pay €1.30 for each Gresham share if it can secure acceptances in respect of 54 per cent of Gresham shares. If this approval rate rises to 80 per cent, a higher offer of €1.35 will kick in.

This is entirely dependent on Red Sea, the Israeli hotel group that owns 28.3 per cent of Gresham. A spokesman for Red Sea yesterday reiterated the company's opposition to both Precinct offers.

The seller of the shares on Tuesday was identified the following day as Deutsche Bank, in accordance with Takeover Panel rules. It is thought that Deutsche Bank handled the sale on behalf of hedge fund manager Pendragon.

The shares were sold at €1.3387. This level would generate no profit for the buyer even if Gresham were to be bought out at €1.35 per share, since stamp duty would absorb any gains.

Mr Balram, who is thought to be of Indian origin, already owned 5.8 per cent of Gresham before Tuesday. He bought this block of shares through the Discount Bank of Israel. If he is confirmed, as is expected, as the buyer of the shares that traded on Tuesday, his holding will have risen to about 10 per cent.

This would be of significant concern to Precinct since it would leave a large block of shares in the hands of what is in effect an unknown entity. If this entity decided, like Red Sea, to oppose the takeover, the consortium would struggle to achieve even the 54 per cent acceptance rate it needs to be successful.

Gresham shares closed unchanged at €1.30 last night.