The story is a fishing expedition. If it is denied, then the PM sets himself up for attacks for not dumping a 'weak' minister. If it is not commented on, then the press can continue to select successors. If it is confirmed, then the press can write stories about possible candidates and the ripple effect in the government. In any case, that is not how this PM works. About the best possible response is to say that the process is complicated and difficult, and no decisions have been made. That allows the press to speculate at will.
Do you think the PM would confide in one of his advisors, who then would leak it to a hostile news outlet? Politics is nasty, but I doubt that he would subject a minister to that kind of petty treatment. I may be wrong, but I think we have a rumour spun into a story by adding all sorts of speculation about other ministers. Just a short while ago CTV was claiming the move of O'Connor would set off a major shuffle.