Updated March 27, 2017 17:47:08

Photo: Myer shares finished at near one-month highs. (ABC Central West: Melanie Pearce)

Shares in department store Myer surged over 18 per cent in late afternoon trade prompting analysts to speculate the retailer is a takeover target and that businessman Solomon Lew is behind the raid.

Myer was the best performing stock of the day, surging 18.3 per cent to $1.26, near a one-month high, against a lethargic market that finished 0.1 per cent lower.

"Late this afternoon, we saw a raid on Myer's shares, a buyer picking up about 10 per cent of Myer's stock and that's started speculation we could see a potential takeover play for Myer," Julia Lee, market analyst at Bell Direct told ABC News 24.

Myer has been a rumoured takeover target for years, with the company trading well below its listing price of $4.10. In late afternoon trade at 3.28pm (AEDT) 81.7 million shares worth $93.9 million changed hands.

"There is some speculation that Solomon Lew is picking up the shares and of course indeed the speculation continues to mount that a takeover might be imminent, then we should see some more short selling helping to support Myer shares," Ms Lee said.

Mr Lew is one of Australia's richest men and is chairman of Premier Investments.

The 72-year-old has a net worth of $US1.21 billion in 2017, according to Forbes, and is behind some of Australia's well-known brands including stationery store Smiggle and clothing retailer Peter Alexander.

South Africa's Woolworths bought David Jones in 2014 after Mr Lew initially blocked the deal and built up a 10 per cent stake in the department store.

Shares in Myer have fallen 8.7 per cent since the start of the year.

"This is one of the most shorted stocks on the Australian retail markets that means a lot of people betting Myer shares will go down and look to profit from Myer's share price falling," Ms Lee said.

Topics: business-economics-and-finance, company-news, retail, markets, stockmarket, australia

First posted March 27, 2017 17:34:31