Several private equity firms have been exploring the possibility of acquiring Peloton (NASDAQ:PTON) as the connected fitness company seeks to refinance its debt and return to growth following 13 consecutive quarters of losses, CNBC reported on Tuesday.
The company’s shares surged more than 21% on the news.
In recent months, Peloton has engaged in discussions with at least one firm regarding the possibility of going private. Although the firm's current level of interest is uncertain, other private equity groups are also eyeing Peloton as a potential acquisition target.
Despite the interest, a deal is not guaranteed, and Peloton may remain public.
Peloton has emerged as an acquisition target after its market capitalization fell sharply from $49.3 billion in January 2021 to around $1.3 billion as of Monday. To make a buyout more attractive, firms have focused on reducing Peloton's operating costs.
Last week, Peloton unveiled a restructuring plan aimed at cutting annual run-rate expenses by over $200 million by the close of fiscal 2025.
As part of the overhaul, Peloton announced that CEO Barry McCarthy would step down following a disappointing earnings report that fell short of Wall Street's expectations.
The company also revealed plans to reduce its workforce by 15%, or roughly 400 employees, noting that "it simply had no other way to bring its spending in line with its revenue."