The Macy’s board of directors has rejected the $5.8 billion “unsolicited, non-binding” acquisition offer from Arkhouse Management and Brigade Capital Management, citing a lack of “compelling value”.

The company said in a statement that its board will not enter into a non-disclosure agreement or provide any due diligence information to the bidders.

Arkhouse and Brigade failed to address the board’s concerns regarding their ability to finance their proposed transaction. 

“Following careful consideration and efforts to gather additional information from Arkhouse and Brigade, the board determined that Arkhouse and Brigade’s proposal is not actionable and that it fails to provide compelling value to Macy’s, Inc shareholders,” remarked Jeff Gennette, Chairman and CEO of Macy’s.

“We continue to be open to opportunities that are in the best interests of the company and all of our shareholders,” Gennette added.

Arkhouse and Brigade last month offered to acquire Macy’s shares they do not own for $21 a piece, equivalent to $5.8 billion. On Monday, the bidders urged Macy’s to respond, mentioning the potential increase from the original offer if they are granted access to the necessary due diligence.

It is likely that Macy’s sees the real-estate focused approach of Arkhouse as wrong for the business, according to Neil Saunders, MD of GlobalData.

Monetizing real estate with no focus on revitalizing the retailer and bolstering trading would produce short-term gains but severely weaken long-term prospects, Saunders explained.

“However, the problem for Macy’s management is that they have also been incredibly poor at adding value. Years of neglect of stores and the fundamentals of retailing has reduced Macy’s market share and relevance in retail. The company is now in a weaker position and is scrambling to engineer profit gains as sales fall.”

There is still hope for the company as incoming CEO Tony Spring will work to revitalize the business, Saunders continued, but any program will take years to deliver.

“Despite management’s rejection, this battle is far from over. And it places Macy’s in an uncomfortable spotlight which highlights many questions over the way the business is run,” he concluded.