Australia's David Jones fell as much as 8.5 percent on Monday on doubts about a A$1.7 billion (1.11 billion pounds) takeover bid by a UK company, and as questions arose over likely interest from rival bidders.
David Jones jumped nearly 15 percent on Friday to A$2.59 after it revealed a bid from EB Private Equity, although the share price was still well below the A$3.12 a share implied by the offer given a lack of information about the bid.
EB's chairman was cited in Australian newspapers on Monday as saying the offer was genuine, but at a preliminary stage.
"There is significant uncertainty over the legitimacy of the bid given the lack of information on the bidding consortium," UBS analyst Ben Gilbert said.
"Given the bid appears highly dependent on property development, it is unlikely the value they see in the business is accessible to the broader market. This limits the scope for a competing bidder," he added.
Gilbert said the bid implied a value of 11 times FY13 earnings before interest and tax, or a 40 percent premium David Jones' global peers, which indicated the offer was too rich.
EB Chairman John Edgar told Australian newspapers his company offered A$1.52 billion ($1.56 billion) in a letter to the board of David Jones in May and increased that last week to A$1.65 billion, but had not expected the initial approaches to be made public.
"We think the offer is a good one and it stacks up both on a technical level and practical level, and approached David Jones with the idea of discussing that," Edgar was quoted as saying by the Australian Financial Review.
He said he hoped to discuss the bid with David Jones Chairman Bob Savage this week.
Companies House, the registrar of privately owned firms based in England and Wales does not have any record of EB Private Equity and Preqin, a private equity tracking firm, has no record of EB's fund raising or deals.
According to its website, EB Private Equity is a real estate investor that counts retail properties among its strategic interests. The website lists no telephone number, address and carries only basic information about its strategy.
Edgar said EB, with $200 million of funds under management, had spoken to financial institutions and investors about joining the bid for David Jones.
"Things are at too preliminary a stage for things to be formulated and firmly in place," he told the Australian Financial Review.
Edgar, who told The Australian newspaper EB was a property-oriented fund that had done deals in Europe, Africa and North Africa, said the firm was mostly interested in David Jones' real estate and had no experience in running retail businesses.
David Jones has been seen as a potentially attractive takeover target, primarily for its property portfolio worth up to A$700 million, that includes flagship stores in the heart of Sydney and Melbourne.
David Jones has said it is still seeking information on EB Private Equity.
David Jones' shares were 6 percent lower at A$2.435 at 0115 GMT in a broader market <.AXJO> up 1.3 percent.
(Reporting by Sonali Paul and Narayanan Somasundaram; Editing by Richard Pullin)