UPDATE 1449 AEST: David Jones has confirmed EB Private Equity as the company behind the takeover offer.
The proposal is said to be at $1.65 billion for a 100 per cent acquisition of David Jones.
This is based on $850 million of equity provided by an EB Private Equity led consortium, $450 million of lending provided by a syndicate of banks and investment institutions and $450 in residual equity for existing David Jones shareholders, a portion of which will be underwritten.
In a statement to shareholders, David Jones said no details of the firm's financial capacity, management or any of the terms of the residual equity have been made clear.
UPDATE 1100 AEST: David Jones shares have shot up by 17 per cent since the announcement, sitting at $2.66 at 1100 AEST.
David Jones chairman Robert Savage advised the company received an unsolicited letter from a non-incorporated UK entity indicating its interest in making an offer for the retailer.
In a statement to shareholders this morning, Savage said no "usual" public information is available on the UK firm.
David Jones directors do not believe they currently have relevant information to enable them to qualify or value the approach, but would alert the market should this change.
Savage recommended shareholders treat any related market comment cautiously.
The move comes in the wake of a major management reshuffle and consecutive sales declines at the department store.
In the quarter ending April 28, David Jones posted total sales of $399.8 million, a 2.9 per cent fall on the previous corresponding period.