Tata Steel has launched a formal bid of 4.7 billion pounds (500 pence per share) for Corus. But CSN has made a higher offer of 4.9 billion pounds (515 pence per share).
The panel is set to intervene in the battle as both the bids are being made through a scheme of arrangement that requires court approval, the Financial News magazine reported.
The report said it would be a rare intervention and has been taken by the panel only three times in its history. The magazine cited unidentified sources as saying that the panel plans to consult the three parties and decide on an auction date and avoid a drawn-out battle.
The panel may decide on a sealed process where bidders' offers are final, or a standard auction held over a period of days, it said.
The terms of CSN's pre-conditional offer remain valid until July 20, 2007, resulting in a long period of uncertainty for Corus and its shareholders, the report said.
Schemes of arrangement, which require the approval of a majority of shareholders holding at least 75 per cent shares, are attractive because the buyer does not need to pay the 0.5 per cent stamp duty tax applicable.
"We have a situation where there are two buyers and you need some mechanism to decide the winner," takeover panel's Deputy Director-General Anthony Pullinger was quoted.
The report also quoted a Corus spokeswoman: "All parties are continuing their dialogue with the panel, as they have done throughout the process."