Reuters: Private Equity: UPDATE 1-Australian regulator probes David Jones mystery offer, trades

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UPDATE 1-Australian regulator probes David Jones mystery offer, trades Jul 3rd 2012, 03:15 Mon Jul 2, 2012 11:15pm EDT * Bid from unknown UK private equity firm revealed Friday, pulled Monday * David Jones shares spiked as much as 19 pct, have since retreated * ASIC says investigating trading by domestic, international parties * David Jones says met continuous disclosure requirements SYDNEY, July 3 (Reuters) - Australian regulators are probing the withdrawn A$1.65 billion ($1.7 billion) takeover offer for David Jones by a little-known Britain-based firm that sent shares in the country's No.2 department store chain on a rollercoaster ride. The Australian Securities and Investments Commission said in a statement on its website it was looking at potential issues over disclosure and trading in David Jones stock by both domestic and international parties. David Jones shares surged as much as 19 percent on Friday after it revealed the offer from EB Private Equity (EBPE), which is not listed in Companies House, the registrar of privately owned firms based in England and Wales, nor recorded by private equity tracking firm Preqin. The shares fell 10 percent on Monday after David Jones said EBPE had withdrawn the offer due to publicity around the approach, prompting calls from investors for an investigation. The ASIC probe will assess the harm or loss among others and whether a formal investigation needs to be conducted, according to its website. The eventual outcome of any investigation that determines misconduct will consider remedial measures including compensation, prison terms and court orders. ASIC declined to comment on whether it would be working with British regulators on the investigation. In response to a query from the Australian Stock Exchange, David Jones said on Monday that it had behaved appropriately in revealing the unsolicited "highly conditional, uncertain and incomplete expression of interest" from EBPE. David Jones said it had received an initial approach in May and had decided to inform the market of a second approach last week because of concerns that news of the bid would leak. According to its website, EBPE is a real estate investor that counts retail properties among its strategic interests. The website lists no telephone number or address and carries only basic information about its strategy. EBPE Chairman John Edgar hired a local communications firm to arrange interviews with Australian newspapers over the weekend and told them the offer was genuine, but at a preliminary stage. Edgar said EBPE, with $200 million of funds under management, had spoken to financial institutions and investors about joining the bid for David Jones. He added that EBPE, based in Newcastle in northeast England, was a property-oriented fund that had done deals in Europe, Africa and North Africa. EBPE declined to comment in response to an e-mail request from Reuters. David Jones has been seen as a potentially attractive takeover target, primarily for its property portfolio worth up to A$700 million, following a near halving in its shares in the past year. It owns flagship stores in the heart of Sydney and Melbourne. Shares in David Jones last traded flat on the day at A$2.33, but are up 3 percent compared with A$2.26 before the approach was made public on Friday. There were at A$4.13 a year ago. Link this Share this Digg this Email Reprints

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