Adrenalina (Miami), a three-unit chain of extreme sports retailing that made a rejected $300 million bid in October to acquire the much larger Pacific Sunwear of California Inc. (Anaheim, Calif., has withdrawn the offer, citing the recent fall in PacSun's stock price. But the company, now a PacSun shareholder, said it still seeks to acquire its larger rival and plans to significantly increase its stake in the company.
Adrenalina also said it has recently spoken to several of PacSun's largest shareholders who have expressed support for Adrenalina.
Adrenalina reiterated it may take its buyout proposal directly to PacSun's shareholders, and said it may seek to replace the existing board members of its larger rival.
Adrenalina chairman and ceo Ilia Lekach said his company was withdrawing its offer due to the weakening of PacSun’s stock price. “However, neither PacSun’s precipitous stock decline and disappointing third quarter financial results, nor the board’s refusal to meet with us has changed our belief in the strategic and financial merits of a combined company,” Lekach wrote in a letter to PacSun chairman and ceo Sally Frame Kasaks, dated Nov. 20, 2008.
Shares of PacSun, a surfing-inspired apparel chain with more than 1000 stores, have lost 89 percent of their market value since October 28, the day before Adrenalina made the higher of its two rejected offers.
Adrenalina sells equipment, apparel and accessories for extreme sports and is affiliated with a television show. Its stores include the “FlowRider,” which allows customers to surf on a simulated wave surface. It also has entertainment and media operations and an e-commerce site.