Kohl’s Corp. shares rose in early trading after the retail chain and Franchise Group Inc. said they entered exclusive talks on a potential $8 billion takeover deal. The companies said in separate statements that they entered a three-week exclusivity period to discuss Franchise Group’s offer to buy Kohl’s for $60 a share. 

Franchise Group said in its statement that it intends to contribute about $1 billion in capital to a transaction, which will be funded through a corresponding increase in the size of its secured debt facilities. The Delaware, Ohio-based company said most of the financing will be provided based on Kohl’s real-estate assets.

The purpose of the exclusivity period is to allow Franchise Group and its financing partners to complete due diligence and financing arrangements, Kohl’s said in its statement.

Kohl’s shares had fallen 15% this year through the end of regular trading Monday, closing at $42.12 for a market value of $5.4 billion. The Menomonee Falls, Wisconsin-based retailer said in February it had rejected takeover offers because they undervalued the company and had engaged bankers to field additional interest.

Both Sycamore Partners and a suitor backed by hedge fund Starboard Value LP had engaged with Kohl’s about a potential deal amid activist investor pressure to sell, Bloomberg News reported. While it was unclear how much Sycamore was willing to pay for Kohl’s, Acacia Research Corp., the Starboard-backed suitor, had offered $64 a share, or about $9 billion.

Last month, activist investor Macellum Capital Management’s bid to overhaul the Kohl’s board was rejected by investors. Macellum contends that Kohl’s should sell its real estate assets or separate the e-commerce division if it’s unwilling to sell the full company.