Sitestar Pulls Cash Bid for Fashionmall

Sitestar Corp., an Encino-based Internet holding company, said Tuesday that it’s withdrawing an unsolicited $22.5-million cash offer for Fashionmall.com Inc. after the online retailer received other higher bids.

Sitestar has “no intention of raising its bid to the levels other suitors have recently publicized,” the company said. In October, Sitestar said it would pay $3 for each of Fashionmall.com’s 7.5 million shares, a 39% premium at the time.

New York-based Fashionmall.com last week received two other offers: a $7-per-share cash and stock offer, including $2 a share in cash, from Van Nuys-based GenesisIntermedia.com Inc., and a $3.50-per-share cash offer from Beverly Hills-based Narax Inc. Still, Fashionmall.com is unlikely to accept either offer because the cash portion is less than the company’s own per-share cash value, an analyst said.

“People are looking to buy a cheap company with a lot of cash,” said analyst Catherine Skelly of Gruntal & Co.

Fashionmall.com, which sells clothing, shoes and accessories online, has about $35 million in cash, or $4.66 a share, she said. The company’s shares fell $1.50, or 36%, to close at $2.63 on Nasdaq.

Fashionmall.com spokeswoman Anne Marie Forehand declined to comment on Sitestar’s decision to withdraw its offer. The company is reviewing the other offers, she said.

GenesisIntermedia.com, which operates an Internet site geared for mall shoppers, was unchanged at $17.13 on Nasdaq. Sitestar shares were unchanged at 8 cents in over-the-counter trading.

Fashionmall.com, which had sales of $3.68 million in the nine months ended Sept. 30, has posted a loss in every quarter since going public in May 1999.