How to check if two controls are overlapping in Windows Forms

I have created a class that allows the user to drag panels on a forms. How can I ensure that the user does not place two panels on top of each other? If they do, I would like to shift/or highlight one of the control while they are both overlapped.

I tried setting this in OnMouseDown event but that didn't quite work.

Also, the number of panels on the form vary depending on the number of pictures the form needs to show. Each panel has a picturebox inside the panel.