Adrenalina's Bid to Purchase PacSun Rejected
On Oct. 20, tiny Miami, Fla.–based retailer Adrenalina made a $296 million unsolicited buyout bid for Anaheim, Calif.–based retail giant Pacific Sunwear of California. Adrenalina, a three-store core action-sports chain, made the buyout offer after attempts to engage PacSun’s chiefs in acquisition talks failed, said Ilia Lekach, Adrenalina’s chief executive.
The news, which brought Lekach’s professional background and his penchant for making unlikely take-over bids to the foreground, caused PacSun’s stock to close up by 5 percent that day after seeing a spike of as much as 13 percent. But analysts cited Adrenalina’s lack of funds as well as a reported $4.3 million in losses for the first six months of 2008. And on Oct. 21, PacSun put the matter to rest with a one-sentence release that simply said Adrenalina’s offer “is not in the best interests of the company’s shareholders.”
Still, Adrenalina’s ill-fated bid, which offered $4.50 for PacSun’s 65.7 million outstanding shares, highlights the mall-based retailer’s current weakened state. PacSun’s stock is off approximately 80 percent from its 52-week high—and earlier in the month, the company said its third-quarter earnings were at the low end of its previously announced earnings guidance range of $0.00 to $0.05 per diluted share. —Erin Barajas
