Billionaire Australian investor Solomon Lew on Monday offered to buy clothing retailer Just Group, valuing it at up to A$898 million (US$824 million) and sending its shares up as much as 12 percent.
Lew made the bid through his company Premier Investments, offering A$2.20 in cash and 0.25 Premier Investments shares for each Just Group share.
Executives at Just Group, whose brands include Just Jeans, Dotti, JayJays and Jacqui E, were not immediately available for comment.
Premier, a long-time investor in Just Group, last month increased its stake to 22.8 percent and put two of its representatives on the board.
"Premier is in a particularly strong financial position and it wouldn't surprise me if and they pounce on a few more in this market," said FW Holst analyst David Spry. "Valuations have come back a lot and there are some good opportunities out there for those taking a longer-term perspective," he said.
Lew has been cashed up since selling Premier's 5.9 percent stake in retailer Coles Group last year in a protracted takeover battle to the eventual buyer, Wesfarmers. Lew is a former chairman of Coles.
In a presentation, Premier said its offer was not subject to any regulatory approval or financing. It will fund the cash portion from its current cash reserves.
Retail shares have been hammered in recent months as investors anticipate a slowdown in consumer spending as the Reserve Bank of Australia aggressively hikes interest rates.
Just shares, which last year announced its first foray into the United States, have fallen 34 percent since the market started to weaken in October 2007, compared with 22 percent for the broader market.
Premier said its offer represented a premium of 16.9 percent to 26.8 percent to the closing Just share price on March 28.
Premier also said it wanted to retain current management of Just Group.
"The offer provides Just Group shareholders with an attractive premium, substantial cash value, as well as a continuing stake in the future growth of Just Group and the potential upside of Premier through a generous scrip component," Lew said in a statement.
Premier's investment vehicle Metrepark, which owns the 22.8 percent stake in Just, plans to vote in favor of the offer if it would give Premier more than 50 percent of Just.