Rumours of a US swoop push Ocado shares higher
INVESTORS went shopping for shares in Ocado on Friday amid fresh takeover talk.
The stock ticked up 1.3pc or 3.9p to 299.9p as market rumours circulated that the US giant behind struggling Asda, Wal-Mart, was eyeing the online grocery retailer.
Last week, Asda unveiled a 7.5pc fall in second- quarter sales – its worst quarter ever – as competition from discounters took its toll.
Wal-Mart, which announced this month it was buying US online retailer Jet.com to expand its ecommerce arm, has pledged to turn Asda around.
US online giant Amazon and US private equity firms with a technology focus have also been talked about as potential bidders.
The idea of Wal-Mart buying Ocado has come up before, with broker Credit Suisse claiming the UK firm lacked the muscle to expand internationally and therefore might be a target for the Asda owner or Amazon.
Société Générale said a swoop for Ocado by Wal-Mart or Amazon could be on the cards if they had their eyes on the company’s technology. But the French broker added: ‘The short-term priority for Wal- Mart is probably to turn around Asda.’
The FTSE 100 Index closed the session 0.3pc or 21.15 points up at 6838.0.5 after US Federal Reserve chairman Janet Yellen gave a faint hint that US interest rates could rise sometime this year.
A slide in the US dollar and a broad rally in commodities including oil, gold and copper propelled basic resource shares to the top of the UK benchmark, with Rio Tinto leading the way, up 3.29pc or 78.5p at 2467.5p.
The price of a barrel of Brent was 0.06pc down at $49.64, while shares in BP spurted 0.66pc or 2.85p to 434.85p. Royal Dutch Shell was 1.26pc or 24.5p slicker at 1972.5p. But healthcare stocks were the biggest drag on the index for the second- day running, with both
Shire and AstraZeneca falling more than 1pc.
CMC Markets analyst Jasper Lawler said: ‘Investors are pulling funds from what now seems to be one of the most politically- sensitive industries in the run-up to the US presidential election.’
That didn’t stop chatterboxes speculating about the latest potential merger and acquisition moves in the sector.
The mutter in the gutter was that Shire was still among several potential bidders considering their options for US osteoporosis specialist Radius Health.
Shire’s shares closed 1.06pc or 52p adrift at 4850p and AstraZeneca backtracked 1.12pc or 56p to 4955p. In small- cap land, San Leon
Energy revved up 82pc or 23.88p to 53p after the oiler’s shares resumed trading following a near eightmonth suspension on AIM.
It comes as the group conditionally raised £170.3m in a share placing to help it seal its long awaited Nigerian oil acquisition. But Sound
Energy spluttered 4.5pc or 3p to 63.25p despite news that the oil & gas group had begun drilling its second well at its Tendrara project in Morocco. ITM Power was 1.1pc or 0.25p off at 22.75p as the hydrogen fuel provider did a supply deal with Arcola Energy. Alexander Mining soared 32.4pc or 0.06p to 0.24p as the group built on gains on Thursday, when it announced a licence agreement with Accudo Metals for projects in Australia.
Osirium Technologies increased 11.5pc or 20p to 193.5p as the cyber security firm did a three-year deal to supply its technology to an unidentified global asset manager.
Ferrum Crescent retreated 3.8pc or 0.01p to 0.26p after the South Africa-focused miner announced an issue of equity from the exercise of options – 44.8m shares with a trigger price of 0.165p – following a share placing earlier this year.
Bellzone Mining lost some of Thursday’s gains, falling 6.5pc or 0.02p to 0.22p, after a positive update on the group’s ferronickel study results from its Kalia project in the Republic of Guinea.