Ocado leaps 7pc as hopes of a major tech deal grow

ONLINE grocer Ocado soared to the top of the FTSE 250 amid rumours it had finally inked a deal with a major foreign retailer.

Shares jumped 7.3pc or 17.5p to 256.2p off the back of reports it is about to strike a deal with Swedish retailer ICA Gruppen.

The speculation was welcomed by starved investors, who have been pushing for the grocer to sell its warehouse technology to a major overseas player as it fights off increased competition from Amazon Fresh.

Shares in the grocer have also fallen almost 20pc in the past four weeks after market research from research firm Kantar showed weaker online grocery adoption and slower Ocado growth.

According to Swedish reports Ocado’s deal with ICA is ‘ imminent’ and likely to be revealed at the beginning of next year.

A deal would be a turning point for Ocado, which has faced backlash from shareholders over its failure to secure a substantial expansion deal abroad.

In June Ocado revealed it had signed a mystery regional European retailer to use its software but not its automated warehouse technology.

Investors were further dismayed by news the retailer was a regional retailer rather than a national seller. The move prompted activist investor Crystal Amber to snap up a stake in the firm, leading calls for it to secure a national deal amid claims of under-performance.

At the time Richard Bernstein, founder of the hedge fund which has a reputation for triggering change in under-performing companies – having previously held stakes in Pinewood, Thorntons and Aer Lingus, all of which have been snapped up by suitors in the past two years – said a number of shareholders were frustrated with Ocado’s failure to secure a deal abroad – a milestone it had promised to reach by the end of 2015.

A deal with ICA Gruppen – Sweden’s leading grocery retailer, would therefore be welcomed by investors. The firm has around 1,300 stores and a market share of around 36pc.

Two major shareholders in cyber- security firm Sophos are today dumping 51m shares in the firm – or 11pc.

Pentagon Lock and Apax Global Alpha will get rid of almost half (49.64pc) their combined holdings in the firm. They announced the planned sale after the markets closed last night.

It will be conducted via an accelerated book build carried out by UBS Ltd, with Moelis & Company acting as financial advisor.

Shares in Sophos have risen more than 163pc over the latest year amid global cyber-attacks.

Yesterday they closed up 3.9pc, or 24.5p, to 646p.

On November 17 chief executive Kris Hagerman sold 185,500 shares at 585p, making £1.08m.

The FTSE 250 finished down 0.3pc or 63.5 points to 19,881.3 while the FTSE 100 finished down 0.4pc or 25.7 points to 7,383.9 points – led by Micro Focus which slumped after analysts downgraded its shares from buy to hold.

Analysts at Deutsche Bank said they ‘struggle to see meaningful organic growth opportunities outside of SUSE’, Micro Focus’s computer operating system.

They added that they believe the risk/reward is currently more balanced.

Shares slumped 3.7pc or 98p to 2557p as a result.

Shares in International Consolidated Airlines, owner of British Airways, took off amid news it had landed Monarch’s sought after runway slots at Gatwick Airport, jumping 1.3pc or 7.5p to 603.5p.

AIM newcomer Keystone Law made its case known on its first day trading.

Shares in the legal business increased 19.4pc to 191p from its initial placing price of 160p.