THE TAKEOVER Panel is believed to have asked businessman Denis O'Brien to clarify whether he intends mounting a bid for Independent News & Media (INM) after the London Observerquoted "sources" close to him indicating that was his ultimate intention.

There was no comment from Mr O'Brien's spokesman on any aspect of his engagement with the panel.

The panel, which also declined to comment, has not issued any statement on its examination of the case.

Mr O'Brien, who has never publicly said what his ultimate intentions are for his investment in INM, now owns more than 21 per cent of the group. Having criticised the INM board, its management and their strategy, he is widely presumed to be planning a bid at some point in the future.

INM has rejected each of Mr O'Brien's attacks and last month branded him a "dissident" investor, accusing him of trying to destabilise the business as he builds his stake.

The company's chief executive and 27.1 per cent shareholder, Sir Anthony O'Reilly, has consolidated his position in recent days by buying up shares to offset the impact of the dilution of all shareholdings that followed an all-share deal with US group Clear Channel Communications.

On March 30th the Observer quoted sources close to Mr O'Brien saying "he isn't intending to sit on the sidelines with his tanks on their lawn for ever and a day".

An unnamed confidant was also quoted in the same article saying "money won't be a problem" in the event of a full bid. That person added that "the company won't be in the same hands further down the line".

The Observer journalist who wrote the story, James Robinson, reported two days ago that the panel's director general, Miceal Ryan, asked the paper last Wednesday to authenticate the quotes in question.

Goodbody Stockbrokers said in a note that potential implications for Mr O'Brien "in the event of indiscretion, and options at the disposal of the Takeover Panel" would appear to include a move to censure him or, if no offer is imminent, a move to prevent him bidding for the group for 12 months.

Analyst Gerry Hennigan said recent stake-building both by Mr O'Brien and Sir Anthony suggests that events are likely to come to a head sooner rather than later.

INM shares closed down 0.37 per cent last night at €2.134.

Many market participants believe such price levels imply the market believes a bid is not imminent.