Peapod's salad days may have ended
Published: 31 Mar 2000 09:18 BST
Peapod, so pressed for cash it is courting takeover offers, has received visits from representatives of United Parcel Service, HomeGrocer.com and Royal Ahold of the Netherlands, according to people familiar with the matter.
But no bid has been made for Peapod, the US' largest online grocer. Earlier this month the resignation for health reasons of its CEO, William Malloy, prompted venture capitalists to drop a planned investment of $120m (£74m). That setback forced Peapod to hire investment-banking firm Wasserstein Perella & Co. to explore strategic alternatives, including selling the company.
Officials of Atlanta-based UPS declined to comment, as did those of Peapod rival HomeGrocer of Kirkland, Washington, and European grocery giant Ahold.
Peapod, which has a market capitalisation of $57m, delivers groceries to customers who place orders online. Its database contains the names, addresses and grocery preferences of 100,000 customers in eight major markets. That could represent a prize for a traditional grocery company seeking to bolster its fledgling online operation or for such competitors as HomeGrocer and Webvan Group.
Like other online companies, Peapod has never earned a penny. In mid-March Peapod said it had $3m to cover operating debts of an amount it wouldn't disclose. Peapod officials won't say how much of that $3m remains.
Andrew Parkinson, founder and acting CEO, said in a statement: "We are working closely with our financial advisers in exploring strategic alternatives for the company but cannot comment on the specifics of the process or on the parties with whom we have spoken regarding a possible interest in the company. I also cannot comment on whether we have received any indications or offers."
Peapod board members are set to meet Friday to discuss their options. Those would include continuing the search for a buyer or finding bridge financing that would allow the company to continue operating in the near term. Another possibility would be to find a new source of venture capital.
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