Dunloe House is now hot favourite to win the takeover battle for Belfast-based property group Ewart after British Land, thought to be the mystery third party interested in making a bid, failed to come up with an offer.

The Ewart board, which met after a bid failed to materialise by yesterday afternoon's deadline, split over whether to accept a takeover offer from Dublin-based Dunloe House or Northern Ireland's Moyne Shelf Company, reliable industry sources said.

Both Dunloe and Moyne have offered £25.7 million cash or 81p sterling per share for Ewart.

Ewart's chairman Mr Brian O'Connor, who holds a crucial 16 per cent stake in the Belfast company, is understood to have informed the board at the meeting that he would give written notice of his intention to accept the Dunloe offer.

The remaining four board members, including non-executive director Mr Harold Ennis, intend recommending the Moyne offer to shareholders, sources said.

But unless Moyne makes a higher offer, it looks like Dunloe has clinched control of more than 50 per cent of the Ewart shares.

The Dublin-based company, which is controlled by solicitor Mr Noel Smyth, has built its shareholding up to 29.8 per cent of Ewart. It also has acceptances of 5.34 per cent, provided there is not a higher offer, giving it control of more than 35 per cent of the shares. With Mr O'Connor's support, it has control of more than half of the Ewart shares.

Moyne, a company run by four Northern businessmen in the licence and pubs trade, could not be reached for comment.

It is understood that Mr O'Connor was in contact with the Takeover Panel in London yesterday evening regarding his position and would not be commenting until early next week, after he had clarified his position.

Mr O'Connor, who already gave conditional approval to an offer of 75p from Dunloe, is thought to favour Dunloe because he is said to like the idea of an all-Ireland property company.

Dunloe's offer also includes a loan stock alternative and an alternative share offer of 19 new Dunloe shares for every five Ewart shares held.

But Ewart's financial advisers are believed to have recommended the Moyne offer on the basis that it intends to keep Ewart as a publicly-quoted company.