Mergers and Acquisitions Work & Wellbeing

Peloton rubbishes takeover speculation as new CEO strikes defiant tone

By John Glenday | Reporter

Peloton

|

Mergers and acquisitions article

February 15, 2022 | 4 min read

Peloton’s new chief executive officer has struck a defiant tone by refusing to countenance a takeover any time soon, despite increasingly desperate calls for the firm to shore up its flagging business.

In one of his first interviews since accepting the poisoned chalice, Barry McCarthy affirmed to the FT that the company would not change hands for the “foreseeable future,” sending shares crashing over 5% as investors digested the unwelcome tidings from the top.

McCarthy said his role is to secure long-term growth and he is not interested in overseeing a sale to the likes of Amazon, Nike or Apple, which he insists was always unlikely.

Peloton

Peloton has suffered a rollercoaster in 2022 with shares surging nearly 40% last week

Instead, the newly-installed chief exec favors positioning Peloton as “a connected fitness company, not a bike company,” staking the firm’s future on digital screens rather than exercise bikes.

The former Netflix and Spotify chief financial officer replaced John Foley in the hot seat last week after his predecessor was ousted under a cloud of recriminations over turgid performance and accusations of mismanagement.

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Championing “higher margins” as the solution to Peloton’s ills, McCarthy has chosen to prioritize content, products and global expansion in a three-pronged plan of attack to dig the company out of the hole the hard way. He said: “If I thought it was likely that the business was going to be acquired in the foreseeable future, I can’t imagine it would be a rational act to move across the country. There are lots of other things I could be doing with my time that are quite lucrative than hanging out with a business that’s about to be sold.”

A sale cannot be entirely ruled out, however, as the final decision rests with Foley and other members of Peloton’s governing board, who collectively control 80% voting power in the business.

Peloton has suffered a rollercoaster in 2022 with shares surging nearly 40% last week amid widely-held expectations that a sale to Marriott, Microsoft or even Goop could be in the offing, although this comes on the back of a 70% collapse in 2021.

Mergers and Acquisitions Work & Wellbeing

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