Outside David Jones store in Castlereagh Street

David Jones shareholders are set to vote on the Woolworths offer on June 30.

South African retailer Woolworths' takeover bid for David Jones - considered a slam dunk since the $2.2 billion offer was made in April - could be losing its footing after Deutsche Bank seized 7 per cent of the department store and Solomon Lew looks to wield his newly acquired minority stake to possibly derail the proposal.

Mr Lew's use of his privately owned SL Nominees to buy a 0.65 per cent stake in David Jones - which was revealed on Friday - rather than his publicly listed retail play Premier Investments was to avoid opening discussions with Premier's independent directors on his plans for David Jones, insiders told BusinessDay.

It comes as major investors representing 10 per cent of the stock have recently sold out of David Jones, BusinessDay has learned, fracturing the register and making it easier for new players to form an attack base.

Solomon Lew.

Face-off: Solomon Lew. Photo: Bloomberg

One fund even raised the possibility that Woolworths' own shareholders might vote against the David Jones bid when it is put to them at a meeting in South Africa on June 17.

David Jones shareholders are set to vote on the Woolworths offer on June 30.

Meanwhile, heavy buying from the investment bank since the middle of May has seen Deutsche's stake race from 5.4 per cent to 6.7 per cent.

Ian Moir.

Woolworths' Scottish boss Ian Moir. Photo: Nic Walker

Deutsche could be acting for a mystery client, mirroring a similar move two years ago when it built up a stake in casino group Echo on behalf of James Packer's Crown using ''cash-settled derivatives'' that initially masked his presence.

Market participants said they believed David Jones has sent tracing notices to shareholders to discover who owns the bulk of its issued capital, including Deutsche.

On Thursday, it discovered former Coles Myer chairman Mr Lew had grabbed the 0.65 per cent stake in David Jones.

Mr Lew has become something of a nemesis for Woolworths and its Scottish boss Ian Moir. The Melbourne businessman has dug in at fashion chain Country Road for nearly 20 years with a minority stake that has left majority owner Woolworths stranded with 88 per cent and unable to take full control.

On the David Jones register, Allan Gray, which at the time of the Woolworths bid had more than 7 per cent of David Jones, has sold more than half its holding, while Pengana has completely sold its position, assumed to be about 2 per cent of the capital.

With many analysts believing Woolworths had offered a full price of $4 per share for David Jones, the emergence of Mr Lew on the register has suddenly made the next 28 days before the shareholders' vote uncertain.

''It's a fair offer from Woolworths, but Lew is going to have to buy more than 0.65 per cent,'' said Jason Beddow, whose Argo Investments is a top-20 shareholder.

''I don't see the logic behind it unless he has got the intention to buy much more, because the transaction has been approved [by the David Jones board] and I think Woolworths has paid a full price for it,'' said Pengana Capital Australian Equities Fund portfolio manager Anton Du Preez.

Mr Du Preez said Mr Lew needed at least 5 per cent to have a greater impact on any vote.

Allan Gray managing director Simon Marais said he was unsure of Mr Lew's intentions.

''It's a full price for that company Woolworths is offering, a big price. Maybe Lew is just having some fun. I'm sure [Mark] McInnes would like to put a poke in the eye of the David Jones board.''

Mr Marais, himself a South African by birth, raised the possibility of Woolworths' shareholders dumping the deal when they meet in 15 days.

''Woolworths have a lot of foreign shareholders and they bought for exposure to Africa. Now, suddenly, they buy something in Australia and I heard there was some unhappiness. Now, whether that translates into a 'no' vote, I don't know.''