Sick Peapod CEO Leaves, Investors Yank $120 Mil 03/16/00 – Company Operations
CHICAGO, ILLINOIS, U.S.A., 2000 MAR 16 (NB) — As soon as Peapod, Inc. [NASDAQ:PPOD] CEO Bill Malloy resigned for health reasons, investors withdrew $120 million, putting the online grocer in the market for desperately-needed cash, or potential buyers, the company said today.
The monetary loss leaves Peapod, an e-grocer providing local and national delivery service, with just $3 million and the task of finding new investors or a buyer before the cash runs out. “There can be no assurances that the company will be successful in finding or completing a transaction or that the company’s resources will be sufficient to enable it to continue its operations during this process,” Peapod said in a news release today.
Early this afternoon Peapod shares had plunged more than 55 percent.
On Feb. 14, investor letters of intent proposed $120 million in equity financing. But Peapod said the investors told the company today that they “are not willing to move forward with the planned investment and are terminating the letters of intent.” Peapod financial advisers Wasserstein Perrella & Co. were directed to pursue funding alternatives or a possible sale of the company.
Peapod said when the investment was announced that Apollo Management, L.P., The Yucaipa Companies, Pequot Capital Management, Inc. and GRP II, L.P. would pump $120 million into Peapod to “significantly strengthen the company’s position in the rapidly growing Internet grocery industry.”
For now, Peapod Chairman and co-founder Andrew Parkinson will take over Malloy’s duties. The nature of Malloy’s illness was not disclosed and a company spokesman was not available for comment today. On Sept. 27, 1999, Malloy left a high-ranking job with AT&T Wireless Services to join Peapod.
Using features Express Shop and Find Item, Peapod customers shop for grocery items online according to price and calorie or fat content. At checkout a delivery time is chosen. But today Peapod’s Web site listed just eight metropolitan areas nationwide in which Peapod delivers. Shoppers there are presented with several shopping options – $10 off the first order, weekly specials, new products, and a running list that keeps track of items chosen to buy. Peapod packages – the DotComGuy Pack and Afternoon Tea Pack – are delivered nationwide by United Parcel Service.
Peapod can be found on the Web at http://www.peapod.com
Reported by Newsbytes.com
(20000316/Press contact: Dan Rabinowitz, Peapod, 847-583-9400/WIRES ONLINE, BUSINESS/PEAPOD/PHOTO)
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