Australian clothing retailer Just Group surrendered to a hostile takeover bid from billionaire Solomon Lew, saying it would recommend the A$810 million ($750 million) offer if it was declared unconditional, propelling its shares up 10 percent.
Just shares, which have consistently traded below the offer price, shot up 33 cents to A$3.58 on Monday after the retailer reversed its opposition to the takeover.
Lew's investment vehicle Premier Investments said earlier on Monday it has received acceptances for 46.97 percent of Just Group shares, edging closer to the 50.1 percent threshold it needs to win control.
Just Chairman Ian Pollard said in a statement while the Premier offer did not recognise the underlying value of Just, the company urged shareholders to accept Premier's offer "in light of the changed circumstances", or sell their shares.
A spokesman said the changed circumstances referred to Premier nearing the 50 percent mark.
Pollard said Just has begun talks with Premier on an orderly transition of control in the event that Premier wins more than 50 percent and declares its offer unconditional.
Just, which only four weeks ago unnerved investors with a profit downgrade, had previously rejected Premier's offer as opportunistic given a retail sector slowdown and a drop in Just Group shares.
Last week, Just, whose brands include Just Jeans and Dotti, gave a more optimistic sales update, saying sales revenue at its 880 stores should be up 3.5 percent in the second half of fiscal 2008, which ended last week.
Australian retailers have been hit by a downturn in consumer spending because of rising living costs. But analysts have said Just's predominantly teenage market is not as badly affected by the surge in petrol prices and mortgage rates.
Premier has offered 0.25 of its own shares plus A$2.095 in cash for each Just share, valuing its offer at A$3.88 per share.