David Jones suitor defends approach The man who claims to be fronting a A$1.65bn leveraged buyout of David Jones, Australia's oldest department stores group, says the offer is not a hoax and that he is serious about striking a deal. John Edgar, chairman of EB Private Equity, a UK-based private equity fund, told local media on Monday that he had "put a lot of work into the offer" for David Jones that stacked up "on a technical and practical level." Mr Edgar told the Financial Review that he had approached Bob Savage, the chairman of David Jones, with a A$1.52bn offer late in May and increased it to A$1.65bn after being told it was not enough. David Jones revealed on Friday it had received an approach from a "non-incorporated" UK entity. It was later forced to reveal the identity of its suitor after EB Private Equity, which claims to have $200m of funds under management, was named as the bidder in a blog post. News of the bid approach saw shares in David Jones rise 14 per cent to A$2.58, valuing the company's equity at A$1.34bn. However, the shares fell 6.2 per cent to A$2.43 on Monday morning as analysts and investors questioned the likelihood of an offer emerging. Trading in David Jones was later halted. The company said it had requested the suspension following further correspondence from EB Private Equity. EB describes itself as a "Luxembourg and UK real estate and real estate related investor, developer and private equity partner." The company's business address is in Newcastle, north-east England. According to the private equity group its offer will be financed by A$850m of equity provided by an EB-led consortium, A$450m of debt, and A$450m of residual equity that will be made available to existing shareholders. While an offer from EB Private Equity may not emerge, David Jones, named after the Wales-born immigrant who opened its first store in central Sydney, is still seen as vulnerable to a bid because of its significant property portfolio. The prize asset in David Jones is its CBD [central business district] properties. We believe these could be sold for $600m, with the prospect for redevelopment of the Market St store (in Sydney)," said Citigroup analyst Craig Woolford. The credit card business may also have value to a third party, albeit the Amex joint venture will probably restrict any deal. We estimate the credit card is worth A$250m. Cannings Communications, a Sydney-based public relations company that was acting for Mr Edgar over the weekend said it could not comment on the bid.