Australia's corporate watchdog launched an investigation on Tuesday into a short-lived bid for retailer David Jones from a mystery British company that reportedly operates out of a post office box.
Shares in David Jones, which has 37 high-end department stores across Australia, spiked 15 percent Friday when it announced the Aus$1.65 billion (US$1.69 billion) offer from British firm EB Private Equity.
The stock then slumped 10 percent Monday, leaving many investors out of pocket, after the retailer said EB Private Equity had withdrawn the bid as "recent publicity around its proposal has made it difficult to proceed".
The Australian Securities and Investments Commission (ASIC) said it had been closely monitoring the case and would investigate trading in David Jones' shares, as well as the circumstances surrounding the disclosure of the bid.
"ASIC's priority is to ensure market integrity is maintained and that markets are fair, orderly and transparent and that, if there has been a breach of the law, those responsible are held to account," it said in a statement.
When it first publicly announced the offer Friday, David Jones noted the bid was unsolicited and came from "a non-incorporated UK entity, about which no usual public information is available".
It told the Australian Securities Exchange (ASX) on Monday that all attempts to learn more about its potential suitor had failed and it had no details about EB Private Equity's financial capacity or management.
Media attempts to learn more about the would-be corporate raider hit a similar brick wall, with EB Private Equity not appearing on the registry of Britain's Companies House and providing scant details on its own website.
The Australian Broadcasting Corporation said the outfit appeared to be little more than a post office box in the northern English city of Newcastle, even though its website claims it is Luxembourg-based.
Newcastle newspaper The Journal's website icnewcastle.co.uk carried excerpts from an interview with a man claiming to be its chairman, John Edgar, in which he said the deal was dropped as the firm preferred to remain low key.
"No one knows about us," he said. "We only operate overseas, not in England or even Europe, (but) in Africa and Australia."
The Wall Street Journal described the episode as a fiasco in which investors who bought the stock in good faith believing the bid to be genuine were the biggest losers.
"For investors who have lost a small fortune, there are too many unanswered questions," it said.
David Jones said in its statement to the ASX late Monday that it had been obliged to reveal the takeover bid Friday under Australia's continuous disclosure laws as news of the offer was set to emerge through media reports.
Melbourne University corporate law specialist Ian Ramsay said the case showed laws designed to give investors access to market-sensitive data needed tightening to make then less vulnerable to questionable information.
"What's occurred here, of course, is far from the way our securities markets are supposed to operate," he told ABC radio.
David Jones shares were trading one cent higher late Tuesday at Aus$2.34.