The man who claims to be fronting a A$1.65bn leveraged buyout of David Jones, Australia’s oldest department stores group, says the offer is not a hoax and that he is serious about striking a deal.

John Edgar, chairman of EB Private Equity, a UK-based private equity fund, told local media on Monday that he had “put a lot of work into the offer” for David Jones that stacked up “on a technical and practical level.”

Mr Edgar told the Financial Review that he had approached Bob Savage, the chairman of David Jones, with a A$1.52bn offer late in May and increased it to A$1.65bn after being told it was not enough.

David Jones revealed on Friday it had received an approach from a “non-incorporated” UK entity. It was later forced to reveal the identity of its suitor after EB Private Equity, which claims to have $200m of funds under management, was named as the bidder in a blog post.

News of the bid approach saw shares in David Jones rise 14 per cent to A$2.58, valuing the company’s equity at A$1.34bn. However, the shares fell 6.2 per cent to A$2.43 on Monday morning as analysts and investors questioned the likelihood of an offer emerging.

EB describes itself as a “Luxembourg and UK real estate and real estate related investor, developer and private equity partner”. The company’s business address is in Newcastle, north-east England.

According to the private equity group its offer will be financed by A$850m of equity provided by an EB-led consortium, A$450m of debt, and A$450m of residual equity that will be made available to existing shareholders.

While an offer from EB Private Equity may not emerge, David Jones, named after the Wales-born immigrant who opened its first store in central Sydney, is still seen as vulnerable to a bid because of its significant property portfolio.

“The prize asset in David Jones is its CBD [central business district] properties. We believe these could be sold for $600m, with the prospect for redevelopment of the Market St store (in Sydney),” said Citigroup analyst Craig Woolford. “The credit card business may also have value to a third party, albeit the Amex joint venture will probably restrict any deal. We estimate the credit card is worth A$250m.”

Cannings Communications, a Sydney-based public relations company that was acting for Mr Edgar over the weekend said it could not comment on the bid.