Retailer David Jones shares rise on rival's takeover bid

A model at a David Jones fashion show Image copyright Getty Images
Image caption David Jones is one of Australia's biggest retail companies

Shares of Australian retailer David Jones have surged after the firm said it had rejected a takeover approach from larger rival Myer last year.

The stock rose nearly 5% in Sydney trading following the announcement.

Australia's second-biggest listed department store operator said they were approached in October but are no longer in talks with Myer.

In a statement, the company said the offer did "not have sufficient merit for David Jones shareholders".

"The execution and implementation of any such transaction would have substantial commercial, market, business and regulatory risks," the company added.

David Jones has been struggling with weak spending at its traditional retail stores as more people shop online.

The Sydney-based company owns valuable property assets and there is speculation it could become a takeover target again.

David Jones had received a takeover offer in 2012 from a UK-based private equity fund. The news sent shares surging but the offer was rescinded days later.

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