The withdrawal of a $1.65 billion takeover bid for national retailer David Jones has bought to a close one of the most bizarre chapters in the companys 174-year history.

In our step-by-step analysis of the bidmade by little-known private equity company EB Private Equitywe unravel the complexities facing David Jones chair Bob Savage, his board and management.

The takeover bid

On May 28, the David Jones board received an email, dated May 22, with an unconditional but incomplete bid for the company. According to The Australian Financial Review, David Jones chairman Bob Savage thought the deal didnt feel right. He emailed the bidder asking for more information. It would be a month before he received any response.

The bidder was John Edgar, representing EB Private Equity, a private equity group that claims to have a focus on property.

The David Jones board was faced with three possibilities: saying nothing until further details were forthcoming; making an announcement; or going into a trading halt.Usually, you would expect the board to quickly make an announcement about a bid, says the chief executive of Chartered Secretaries Australia, Tim Sheehy.

My hunch is that they hesitated because they had doubts about the legitimacy of the bid, he told LeadingCompany. In a perfect world where a bid came through a well-known, recognised investment bank, and was legitimate, they would have to disclose relatively quickly. This one didnt seem bona fide from the start, and they set about investigating.

The David Jones board was under no obligation to reveal the bid by EB Private Equity, says professor Ian Ramsay, director of the centre for corporate law and securities regulation at Melbourne University. Ramsay was responsible for the review that led to changes in corporate law in 2004 in the wake of corporate collapses such as HIH insurance in 2001.

The ASX requires under listing rules disclosure of material information [that will affect the share price], but there is a carve out and that includes an incomplete proposal, he said.

On June 28, a day before David Jones finally revealed the offer, EB Private Equity responded to Savages request for more information. The email contained few new details about the bidder, but did update the offer to $1.65 billiona 40% premium on the companys then market value.

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Anatomy of a farce: rights and the wrongs of a DJ dalliance