West 49, a major action sports retailer in Canada, today rejected an unsolicited takeover bid from Adrenalina.
Adrenalina, which previously sought unsuccessfully to acquire major U.S. action sports retailer Pacific Sunwear, tendered the unsolicted offer yesterday, according to news reports.
Adrenalina's offer valued West 49 at 55 cents (Canadian) per share - or $35 million.
West 49's Q4 08 results, the most recent available, showed sales of $62.4 million, a slight increase from the prior-year Q4. Same store sales dropped by -4.5 percent for the company and by -2.4 percent for the West 49 banner stores.
The Burlington, Ontario retailer operates 134 stores in nine Canadian provinces and two e-commerce sites. It bills itself as Canada's leading action sports retailer, and in addition to West 49 operates Off The Wall, Amnesia/Arsenic, D-Tox, and Duke's Northshore stores.
Its west49.com site focuses on skate and music, and offerings include D.C. shoes, Quiksilver, Hurley, Circa, Osiris, Vans, Billabong, Element, Globe, Fox and dozens of other large and small action sports brands from around the world.
In rejecting Adrenalina's offer, the West 49 board in a release said it did not believe the offer was in the best interests of the company or its shareholders best interest and cited many of the same reasons as PacSun's board:
"The board of directors noted that Adrenalina is an unlisted U.S. public company that has recently indicated that it does not have the financial resources to file its legally required annual report," West 49's statement said. "(It) has an unproven business model and operates a very small number of highly expensive retail stores in the U.S., and has recently made a similar and unsuccessful unsolicited attempt to acquire Pacific Sunwear of California, Inc."
Here's a link to a story today in the online Canada Press about West 49's response.
And here is a link to a story today in the Toronto Globe and Mail about Adrenalina's offer.