An investor group has offered to scoop up all outstanding Macy’s stock not owned by the group as it attempts to take the company private.

Arkhouse Management, a real estate investment firm, and Brigade Capital Management, an asset management company, submitted a Dec. 1 proposal offering $5.8B, or $21 a share, to acquire all Macy's stock not owned by the two entities. The offer represents a 32% premium over the value of the stock at the time of the offer, The Wall Street Journal reported.

The investor group says Macy’s is undervalued in public markets. Despite the premium offered by the two firms, Macy's stock price has risen this month, closing Friday at $17.39. The stock surged more than 17% in Monday premarket trading, according to CNN.

The firms have discussed the proposal with Macy’s, whose board subsequently met to discuss the offer, according to the WSJ.

Macy’s operates more than 700 retail stores in 43 states, Washington, D.C., Puerto Rico and Guam, including about 500 Macy’s locations, 55 upscale Bloomingdale’s stores, and 160 beauty and skincare Bluemercury stores, which it acquired in 2015, CNN reported.

Despite Macy's strong brick-and-mortar presence and recent share bump, its stock price has fallen significantly since the dawn of the pandemic. In 2015, it traded at $70 a share, according to the WSJ. Competition from online retailers and reduced demand for apparel and accessories has eaten into Macy’s value, causing it to cut its full-year outlook on sales and products earlier this year.

Macy’s this year also reported credit card revenues in the second quarter were interrupted by payment delinquencies that hit $120M. Although that figure was down $84M from Q1, analysts said it shows a pattern in consumer spending that is cause for concern.

But Macy’s has also shown resilience in response to e-commerce trends. Last holiday season it converted almost 1M SF in 35 stores to mini-distribution centers to complement its fulfillment network and help ramp up its online business during Q4.

Macy’s saw about $1.2B of profit on $24.4B of revenue in the last fiscal year, which is a slight decrease from $1.4B of profit in 2021, the WSJ reported.

Neil Saunders, a retail analyst with GlobalData, said Arkhouse likely sees value in Macy’s real estate.

“An investor group that sells off real estate and perhaps takes other actions such as spinning off the e-commerce business would certainly make some short-term gains,” Saunders told CNN, adding that strategy could hurt Macy’s as a retailer.

“Unless some of those profits were reinvested in revitalizing the core retail business, it would leave Macy’s in the worst of all worlds,” he said.

Arkhouse typically focuses on real estate, according to the WSJ. In 2021, it was part of a consortium that made an unsolicited bid for Columbia Property Trust, which ultimately sold to a different investor group for $2.2B.

Brigade Capital Management has about $25B worth of assets under management, and its investments have included JCPenney, Sears and Neiman Marcus, the WSJ reported.