Macy’s investors mount a $5.8 billion buyout bid. On Sunday, a source who is acquainted with the situation stated that an investment group consisting of Arkhouse Management and Brigade Capital has offered to take the department store chain Macy’s (M.N.) private for $5.8 billion.

The individual stated that on December 1st, Arkhouse Management, an investment business focusing on real estate, and Brigade Capital Management, a global asset management firm, presented a bid to purchase Macy’s stock that they do not already hold for $21 per share. In the early afternoon of Sunday, the Wall Street Journal published an article on the offer.

Compared to the closing price of $17.39 on Friday, the offer for Bloomingdale’s parent company represents a premium of 20.76%.

At the time of the closing bell on Monday, Macy’s shares were trading at $20.78, representing a roughly 20% increase. In addition, other department store operators, such as Kohl’s (KSS.N) and Nordstrom (JWN.N), had a premarket increase of around 4%.

The investment group already has a significant position in Macy’s through funds managed by Arkhouse. They have held discussions with the department store chain about the idea, and the board of directors of the department store company subsequently convened to discuss the offer. Those familiar with the situation have stated that it is not entirely obvious how the store feels about the plan.

The WSJ report stated that Arkhouse and Brigade have expressed their belief that Macy’s is undervalued in the public markets. They have indicated a willingness to raise the offer, subject to due diligence. Additionally, the report stated that an investment bank had provided a letter supporting the group’s ability to raise the necessary financing to complete the deal.

At the same time that Arkhouse and Brigade did not reply to Reuters’ requests for comment, Macy’s declined to comment on the matter.

As a result of decreased stocks and strong demand for beauty items in November, the store surpassed the projections experts had provided for quarterly profit. This indicates that the business’s efforts to reduce inventory from 2022 highs were successful before the crucial holiday shopping season.

Macy’s has a market value of over $4.77 billion, and the company’s shares have decreased by nearly 15.79% this year.

Since Arkhouse and Brigade have never engaged in any endeavor of this magnitude, it is difficult to determine whether or not they possess the resources necessary to carry out a transaction of such magnitude.

A group of investors under the direction of Arkhouse made a $2.4 billion offer for the real estate investment trust Columbia Property Trust two years ago. However, the bid they submitted was rejected. The following acquisition of Columbia Property by Pimco was for $3.9 billion.