Retail billionaire Solomon Lew is playing a high stakes game of poker against David Jones' South African suitor, and his next move has everyone guessing.
The veteran retailer has bolstered his stake in the department store to just under 10 per cent, buying more than 53 million shares for around $200 million.
Some in the market suspect he is working towards a 15 per cent stake ahead of a June 30 vote by David Jones shareholders on the company's takeover by South Africa's Woolworths Holdings.
A stake of that size could give Mr Lew the power to block the $2.2 billion takeover, but the motives for such a tactic remain unclear.
"Stopping at 9.89 per cent is a real mystery and it looks like he is playing his cards close to his chest at the moment," CMC Markets chief market strategist Michael McCarthy said.
"Once any single shareholder goes above 90 per cent they can compulsorily acquire the outstanding shares.
"So if Mr Lew does go over 10 per cent then it'll be clear he wants to block Woolworths' takeover."
Mr Lew's privately owned Australian Retail Investments holds his 9.89 per cent David Jones stake, after purchases made since May 9.
He could use his other company, the publicly listed Premier Investments, to buy more shares, analysts said.
Mr Lew may also want Woolworths, the majority owner of Country Road, to buy his 12 per cent stake in the clothing retailer, and a blocking vote in the David Jones takeover could force their hand, Mr McCarthy said.
"It's not impossible that Mr Lew is forcing a negotiation and it's not impossible that we'll see both of those shareholder situations resolved in a single deal," he said.
Mr Lew could also use his David Jones stake as leverage to protect his interests as a major supplier to David Jones, IG Markets strategist Evan Lucas said.
His company Premier Investments owns popular clothing brands including Portmans, Jacqui E, Peter Alexander and Smiggle.
"Premier Investments is looking for new deals with David Jones and this may be another way of getting involved and getting a very big say at the table with Woolworths," Mr Lucas said.
"Either way, Solomon Lew is an X-factor guy.
"He can do all sorts of weird and wonderful things and has a track record of reaching an outcome that's of benefit to him."
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