Arkhouse Management and Brigade Capital Management have offered to buy Macy’s for $5.8 billion, people familiar with the matter told CNBC on Sunday.

The offer values the retailer at $21 per share, according to the sources. Macy’s closed at just over $17 a share on Friday, down roughly 17% since the start of the year. The company’s shares were up more than 21% in Monday.

Arkhouse, a firm that primarily targets real estate investment, and Brigade Capital, an asset management firm, would be willing to offer a higher bid based on due diligence, the sources said. The group would already be paying a premium for the department store, which has struggled to keep up with online competitors.

Macy’s has made several efforts to draw customers back to its brick-and-mortar chains. In October, it announced 30 new store locations at strip malls as it tried to pivot away from the traditional shopping mall.

Despite the turnaround efforts, Macy’s sales have slumped, declining 7% year over year in the third quarter.

The retailer expressed optimism after its most recent quarter beat Wall Street’s expectations. By the numbers, that performance improvement was driven mostly by sales at brands that Macy’s owns, like Bloomingdale’s and Bluemercury, not the namesake Macy’s chain.

Macy’s has become an acquisition target as it grapples with sagging sales and competition not just from online upstarts, but also from brands that would rather sell their products directly to consumers than wholesale through a department store. Kohl’s faced a similar takeover bid in 2022 when it received multiple acquisition offers that it said undervalued its business.

Retailers across the board have faced headwinds this year as volatile interest rates and high inflation weigh on consumers’ wallets. However, consumer spending has proven particularly resilient in the online shopping sector.

Consumer spending was robust online during Black Friday and Cyber Monday but it’s still unclear how strong the holiday season will be after numerous retailers issued cautious fourth-quarter outlooks.

Arkhouse, Brigade and Macy’s declined to comment.

The Wall Street Journal first reported the buyout offer.

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