Department store chain Macy’s has received a $9.5 billion acquisition offer from an investor group composed of real estate-focused investing firm Arkhouse Management and global asset manager Brigade Capital, according to the Wall Street Journal.

The investor group offered to acquire Macy’s shares they do not own for $34 a share, the Wall Street Journal reported on Sunday.

Stephanie Jimenez, senior manager of Macy’s corporate communications, told Inside Retail the company declined to comment on the offer at this time.

Initial reaction to the news was far from positive.

“While this would be lucrative for investors, it would not, in our opinion, bode well for the future of Macy’s,” said Neil Saunders, MD at GlobalData. “As critical as we are of Macy’s current management, they are at least focused on trying to run the business as a retailer.

“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. But unless some of those profits were reinvested in revitalising the core retail business, it would leave Macy’s in the worst of all worlds.”

The offer comes amid tough competition from online retailers, which have taken a big bite out of Macy’s value.

Saunders noted that Macy’s real estate portfolio is valued at least $6 billion based on a conservative estimate and Arkhouse’s bid is 32 per cent over the share price.

“Management must now make a judgment call. Either they show confidence in their future plans and keep Macy’s as a public company, or they let Macy’s go private in a transaction that will likely see the brand fade further and faster,” said Saunders.

Last month, Macy’s disclosed its third-quarter net sales declined 7 per cent year over year to $4.86 billion while net income plunged 60 per cent to $43 million.