Adrenalina Makes Bid to Acquire PacSun

Adrenalina (Miami), a three-unit chain of extreme sports retailing, has made a bid to acquire Pacific Sunwear of California Inc. (Anaheim, Calif.) in a stock deal worth about $300 million. The company made an offer to PacSun's board of directors after being turned down by the retailer’s ceo, Sally Frame Kasaks.

According to the Daily News Record, Adrenalina chairman and ceo Ilia Lekach sent a letter to Kasaks last week offering to purchase all issued and outstanding shares of common stock of Pacific Sunwear at a price of $4.50 per share, 24.3 percent greater than the stock's closing price on Oct. 17, 2008, which was $3.62. Kasaks declined the offer.

“We are confident that this transaction will create value for PacSun shareholders well in excess of that which can be achieved by your company proceeding on its own,” Lekach wrote. “Not only does the proposed acquisition price represent a premium to the current price of PacSun shares, but the stock structure of the transaction would allow your shareholders to participate in the future growth and performance of the energized combined companies.”

Lekach told DNR that “PacSun has serious identity problems. They have to reposition themselves to become relevant to the customers that they are targeting, and I think that Adrenalina can reenergize and bring that to PacSun.” He said he had been attempting to contact Kasaks via e-mail for “over a year.”

Adrenalina has just three stores and showed a net loss of $5.8 million last year. DNR said it had just over $329,000 in cash at the end of the second quarter. But Lekach didn’t seem bothered. He said a deal with PacSun would be “very easy to finance.” “I’m highly confident that we can finance this deal,” he told DNR, noting that the money would come from “private individuals, institutional buyers and strategic partners.”

Though PacSun has been struggling, it’s still a company with 937 stores and $1.45 billion in revenue.

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.