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Peapod Loses $120 Million Investment After CEO Leaves

Peapod Inc. Thursday announced its president and chief executive officer, Bill Malloy, has resigned, prompting one of its leading backers to nix a $120 million investment.

Malloy will step down immediately because of health reasons. He will be replaced by Andrew Parkinson, the online grocer's chairman and co-founder.

Citing Malloy's resignation, a group of investors -- Apollo Management LP, Yucaipa Cos., Pequot Capital Management Inc. and GRP II LP -- have rescinded their offer to inject the company with a $120 million investment. Peapod (PPOD) said it directed its financial advisors, Wasserstein Perrella & Co., Inc., to explore strategic alternatives available to the company, including possible alternative financing or a possible sale. The company currently has $3 million in cash.

"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 statement.

Peapod provides online shopping service for a variety of supermarket items. It competes in the space with companies such as NetGrocer, Webvan (WBVN) and ShopLink.