Pacsun Guys collection

Dec 15 (Reuters) - Athletic-clothing retailer Adrenalina withdrew its buyout offer for Pacific Sunwear of California , citing the recent fall in the company's share price, but said it still seeks to acquire its larger rival.

Adrenalina, which is now a shareholder of PacSun, said it 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.

"Shareholder value at PacSun has continued to deteriorate at staggering levels over the past month," Adrenalina CEO Ilia Lekach wrote in a letter dated Nov. 20 to PacSun CEO Sally Kasaks.

Shares of PacSun, a surfing-inspired apparel chain with more than 1,000 stores, have lost 89 percent of their market value since Oct. 28, the day before Adrenalina made the higher of two rejected offers.

The shares, which have lost 89 percent of their market value since they touched a 52-week high of $15.90 last December, were trading flat at $1.74 Monday morning on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Pratish Narayanan and Anne Pallivathuckal)