(Reuters) -Macy’s mentioned on Sunday it had rejected Arkhouse Administration and accomplice Brigade Capital Administration’s $5.8 billion proposal to take the division retailer operator non-public, citing issues over deal financing and valuation.

Like different legacy division retailer operators, Macy’s (NYSE:) has struggled to compete in opposition to youthful, on-line opponents or friends with smaller brick-and-mortar footprints. This has given Arkhouse, a real-estate-focused investing agency, and Brigade, a hedge fund, a gap to place strain on Macy’s to discover a sale.

The 2 funding corporations submitted a proposal final month to amass the shares of Macy’s they do not already personal for $21 a share. The duo sees “the potential for a significant improve to the unique proposal if we’re granted entry to the required due diligence,” Arkhouse mentioned in an announcement.

However Macy’s mentioned the supply was not financially engaging or credible sufficient to grant such entry.

“The board has decided to not enter right into a non-disclosure settlement or present any due diligence info to Arkhouse and Brigade,” Macy’s mentioned in an announcement.

Macy’s additionally mentioned that info furnished by Arkhouse and Brigade “failed to deal with its board’s issues concerning Arkhouse and Brigade’s capacity to finance their proposed transaction.”

Macy’s just isn’t working a sale course of with different events and no different unsolicited bidders have emerged that meet the corporate’s expectations a few potential deal, in keeping with folks acquainted with the matter. Macy’s expects a profitable bidder to indicate sufficient dedicated financing and have a observe document of pulling off buyouts within the retail sector, the sources added.

The Arkhouse and Brigade Capital Administration-led investor group has a big stake in Macy’s by Arkhouse-managed funds, Arkhouse mentioned.

Arkhouse mentioned that funding financial institution Jefferies, which is appearing because the buyout group’s monetary adviser, “has supplied a extremely assured letter supporting our capacity to lift the required funds for the transaction.”

Macy’s, nevertheless, known as the financing uncommitted and mentioned it got here with quite a few non-standard preconditions.

The funding corporations’ bid has spotlighted how undervalued Macy’s is relative to its actual property, which is projected by analysts to be value between $7.5 billion to $11.6 billion.

Macy’s owned 316 of its 722 complete shops as of the top of January, in keeping with its most up-to-date annual report.

Macy’s final week mentioned it’s slicing 2,350 jobs and shutting 5 shops at it goals to streamline operations.