Department store Kohl’s has received an offer of about $9 billion to go private in a deal with an investment consortium backed by activist hedge fund Starboard Value, according to two people familiar with the matter.

The offering highlights the renewed interest activist investors are showing in department stores, as brick-and-mortar retailers have struggled with supply chain issues during the pandemic and growing competition from online venues. Shares of retailers have been under pressure for several years, while those of online sites have, until recently, soared.

Kohl’s is already under pressure to improve its share price. Activist firm Macellum Advisors, which owns a 5% stake in Kohl’s, urged the retailer in a letter last Tuesday to explore strategic alternatives, including a sale. This was after he raised similar criticism over Kohl’s stock performance last year.

The rapid procession of Macellum’s letter and the consortium’s offer may be the start of a dance to pressure Kohl’s to consider a sale — or otherwise rapidly raise its share price. In response to Macellum’s letter, Kohl’s said last week that it had confidence in its board of directors and would “aggressively pursue the best interests of all shareholders.”

Kohl’s, based in Menomonee Falls, Wisconsin, and founded in 1962, is a department store specializing in casual clothing, homewares and sporting goods. Unlike other retailers like Nordstrom, Kohl’s stores are often found in smaller malls, rather than strip malls. This has made his real estate more valuable as malls have fallen on hard times.

A key question will be whether the Starboard Consortium will secure the necessary funds to finance the offering, especially given the challenges posed by past leveraged buyouts from retailers, such as Toys “R” Us, Payless and Neiman Marcus. These deals put retailers in debt, preventing them from making the necessary investments as e-commerce transformed the retail landscape. All three were ultimately unable to repay their loan and filed for bankruptcy. Neiman Marcus and Payless emerged from bankruptcy, while Toys “R” Us was eventually liquidated.

Kohl’s shares have risen less than 4% over the past year, giving it a market capitalization of about $6.5 billion. The offer, first reported by The Wall Street Journal, would value the retailer at $64 per share, a 37% premium to its closing price of $46.84 on Friday.

Acacia Research Corporation, which is leading the bid, has been backed by Starboard since 2019. Starboard helped Acacia raise a “significant” amount of equity to fund its bid, one of the people with knowledge of the talks said. Acacia also received a letter of trust from a bank, the person said, noting that the bank believes it can help raise some of the debt needed for the transaction. Acacia is also in talks with a real estate company that would sell some of Kohl’s real estate to help fund the offer, the person said.

The two people who spoke on the subject requested anonymity because the offer is confidential. A spokeswoman for Kohl’s did not immediately respond to a request for comment.

Even with the financial uncertainty, the offer could put pressure on Kohl since Macellum has threatened to appoint directors to Kohl’s board “if the status quo persists.” Macellum criticized Kohl’s in his letter for “mismanaging the business and failing to implement necessary operational, financial and strategic improvements.” He is pressuring Kohl’s to consider divesting from its e-commerce business.

Macellum reached a settlement with the retailer last April that included adding three new directors to its board. Shares of Kohl’s have fallen more than 20% since then as supply chain challenges hampered the industry.

“We have continued to engage with Macellum since the settlement and are disappointed with the path they have taken and the unfounded speculation in their announcement and letter,” Kohl’s said in response to Macellum.

Kohl’s argued that its push to invest in its online sportswear business was underway — and gaining traction. In November, it announced that its third-quarter sales jumped 16%. In December 2020, it announced a partnership with Sephora to help attract more shoppers to its stores. Its active wear business, which it is working to make more inclusive of all sizes, now accounts for just over a quarter of its sales.