Men's and ladies' wear chain Austin Reed has rejected a takeover bid from financial vehicle Dawnay Day and has reportedly now been approached by Harold Tillman, boss of rival retailer Jaeger.

Dawnay announced late last week that Reed minority sharholders Guy Naggar and Peter Klimt wanted the company's board to recommend a possible cash offer of 131 pence per share.

The board said it had reviewed the approach and concluded "…the level of the proposed cash offer significantly undervalues Austin Reed and its prospects".

"The board has unanimously rejected the Minority Shareholders' approach and urges shareholders to take no action at this time," the company said.