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Technology Stocks : Peapod (PPOD) -- Ignore unavailable to you. Want to Upgrade?

To: James Mitchell who wrote (1133)	3/30/2000 9:38:00 PM
From: Moominoid	Respond to of 1170

No I didn't doubt it. Takeover seems the most likely option. Now we have the names. The question is how much they bid against each other and if they are all really interested, and therefore how much we'll get for our shares....

To: James Mitchell who wrote (1133)	3/31/2000 9:36:00 AM
From: Moominoid	Read Replies (1) \| Respond to of 1170

Collected from the Yahoo thread: News March 31, 03:28 Eastern Time No one wants to take over online grocer Peapod so far, sources say Beleaguered online grocer Peapod Inc. so far has failed to attract a firm bid for the company, despite an aggressive effort by its investment banking firm to solicit takeover offers in the past week, according to sources familiar with the situation. The Internet's largest supermarket began searching for a merger partner or an outright buyer after the March 16 resignation of chief executive Bill Malloy. His departure for health reasons prompted venture capitalists to drop a planned $120 million investment and left Peapod with only $3 million to pay for ongoing operations. Through its investment bank of Wasserstein Perella & Co., the Skokie, Ill.-based online grocer contacted a number of industry competitors, including HomeGrocer.com, Streamline.com and Webvan Group., sources said. Peapod has also held talks with several brick-and-mortar companies that might want to enter the Internet grocery business, such as United Parcel Service of America Inc., and grocery giants Kroger Co. and Royal Ahold NV of the Netherlands. Wasserstein Perella set a deadline at the close of business Wednesday to accept bids for the company. But no offers have arrived. ``My indication is that they are negotiating with a lot of industry players and a lot of people are calling them. But nothing has happened yet,' said Arvind Bhatia, an Internet retailing analyst with Dallas-based Southwest Securities who has spoken with senior Peapod executives, including founder and chairman Andrew Parkinson. Without an immediate infusion of cash, Peapod will likely run out of operating cash in less than a month and be forced to shut down, analysts said. According to J.C. Bradford & Co. analyst Barry Stouffer, the company could be considered ``technically insolvent' now as a result of mounting bills owed to its vendors. Stouffer said the Peapod board met Thursday to consider its options, which include continuing the search for a buyer, finding bridge financing to keep the company afloat or tapping a new source of venture capital. Neither Peapod nor any of its reported buyers would comment Thursday. But Parkinson released a statement that read: ``We are working closely with our financial advisors in exploring strategic alternatives for the company, including possible financings or a sale of the company. I cannot comment on the specifics of the process ... or whether or not we have received any indications of interest or offers.' Started in 1989 by two brothers in Evanston, Ill., Peapod pioneered the deliver of groceries to customers who place their orders online. The company serves some 100,000 customers in eight major markets and built two centralized warehouses in Niles, Ill., and San Francisco to fill orders. Most analysts think there is some value remaining in Peapod, which has a market capitalization of $59 million. Stouffer estimated its warehouses could fetch as much as $15 million. But he said its customer base won't be nearly as valuable to rival companies since consumers will likely migrate to other service providers anyway if Peapod folds. ``It's hard to make a case that Peapod should be worth more than its current market capitalization,' he said. Indeed, Streamline.com Inc. turned down an offer by Peapod to take over its Chicago-area operations, according to founder and chairman Tim DeMello. Peapod's customer list did not include enough suburban households to support Streamline's business model, which targets nonurban residential areas. ``Their customer list was just OK but not good enough,' DeMello said. ``At the end of the day, we didn't want to focus our energy on consolidating a competitor.' Peapod announced last month that the firm had secured a commitment for $120 million from a group of investors, including Pequot Capital Management Inc. and Leon Black's Apollo Management LP. The promise of cash came as Peapod faced growing competition from Streamline and Webvan, both of which will be entering the Chicago region. But Malloy's departure and the loss of the $120 million investment prompted a devastating selloff of its stock. The share price traded Thursday at $3.25, far from its 52-week high of $16.37. Despite the company's current woes, Southwest Securities analyst Bhatia argues that Peapod shares should be valued somewhere around $16 to $20. ``Peapod has the highest average order size and the best margins in the industry,' he said. ``If Peapod doesn't survive, it will be bad for the entire sector.' (c) 2000, Chicago Tribune.