Australia's David Jones (DJS.AX) said a little known UK-based private equity fund had pulled a A$1.65 billion ($1.7 billion) takeover approach for the department store chain, sending its shares plunging and prompting calls for a probe by regulators.

Shares in Australia's second-biggest department store chain dived as much as 14 percent when they resumed trading late on Monday, reversing the near 15 percent gain on Friday when the unsolicited offer from EB Private Equity (EBPE) was disclosed.

David Jones told the stock exchange on Monday that it had requested more information and offered to discuss the proposal but had been advised that the plan had been withdrawn.

"It is ridiculous. It is the most scandalous action to go through the market, not on David Jones part but on the part of whoever started it," said Angus Gluskie, Chief Investment officer at White Funds Management, which owns David Jones shares. "The regulators should have a massive look at this."

A spokesman for the corporate regulator Australian Securities and Investments Commission had no comment on the matter.

Doubts about EBPE's bid began emerging on Friday.

EBPE is not listed in Companies House, the registrar of privately owned firms based in England and Wales, nor recorded by private equity tracking firm Preqin.

According to its website, EBPE is a real estate investor that counts retail properties among its strategic interests. The website lists no telephone number, address and carries only basic information about its strategy.

"The EBPE (EB Private Equity) letter states that recent publicity around its proposal has made it difficult to proceed," David Jones said in a statement to the stock exchange.

EBPE's Chairman John Edgar was cited in Australian newspapers on Monday as saying the offer was genuine, but at a preliminary stage in response to concerns over the legitimacy of the offer.

Edgar said EBPE, with $200 million of funds under management, had spoken to financial institutions and investors about joining the bid for David Jones. He added that EBPE was a property-oriented fund that had done deals in Europe, Africa and North Africa.

EBPE declined emailed requests to comment to Reuters.

"ASX will not comment specifically on David Jones," a spokesman for the exchange said on Monday. "ASX's focus is on ensuring the market is properly informed."

David Jones has been seen as a potentially attractive takeover target, primarily for its property portfolio worth up to A$700 million, following a near halving in its shares in the past year. It owns flagship stores in the heart of Sydney and Melbourne.

($1 = 0.9756 Australian dollars)

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