Australian clothing retailer Just Group Ltd has rejected an unsolicited AUD814m (US$777m) takeover bid by Premier Investments Limited as too low.

Premier, which is chaired by retail mogul Solomon Lew, made its offer of $2.20 cash and 0.25 Premier shares for each Just Group share, last month - in a deal that valued Just group at AUD900m.

But Just stock is now trading at above this level - and the company says it is not in shareholder interests to accept the Premier bid.

A statement from Just Group chairman Ian Pollard said: "Premier's opportunistic offer materially undervalues the company.

"It does not adequately recognise the value of Just Group's strongly performing business, our leading market positions in the fast fashion retail sector and our excellent growth prospects."

The retailer operates 885 stores in Australia and New Zealand under the Peter Alexander, Dotti, Just Jeans and Portmans brands.

It forecasts earnings per share will be up 14% to 33.4 cents in the year ending July and will rise to at least 40 cents next year.

However, Premier believes current operating results are "disappointing," and that full year results for the current year are below broker expectations.

It also argues Just Group's like-for-like sales are down 1.4% for the 17 weeks to 24 May.