Chatter of two more big deals sends Ocado flying
GrowinG speculation that more international deals could be in the pipeline has sent shares in
Ocado flying.
The online grocer surged 7.8pc, or 30.5p, to 423p yesterday amid rumours that it is poised to announce more deals to sell its warehouse technology to companies abroad.
ocado first announced a longanticipated partnership to license its ocado Smart Platform, which includes mechanical handling equipment and software for a customer fulfilment centre, with the French retailer Casino back in november.
Markets are now speculating it is set to reveal another deal with Swedish retailer iCA Gruppen.
According to Swedish reports a deal is ‘imminent’ and likely to be announced early this year.
The City is also rife with rumours that the US giant walmart is in talks to make an outright swoop for the company. Shares in ocado have surged by more than 35pc since its tie-up with Casino was first announced.
Prior to the announcement the company had faced a backlash from shareholders over its failure to secure a substantial expansion deal abroad.
ocado is also one of the most shorted stocks – where traders bet on a firm’s share price falling – on the London Stock Exchange.
As much as 14.3pc of its stock is short-sold, according to Financial Conduct Authority figures. That represents around £35.2m of its market value.
Activist investor Crystal Amber, which snapped up a stake in the firm last year amid claims of underperformance, said in December: ‘we are of the view that one or two further international partnerships are highly likely to be secured sooner rather than later.’
Shares in Whitbread, the UK’s largest hospitality group, also nudged up, by 0.1pc, or 4p, to 3974p, after Barclays analysts upgraded its target price and said a sale of Costa coffee shops was the most obvious step forward, if a shake-up was to happen.
in December activist investor Sachem Head, a new York-based hedge fund, snapped up a 3.4pc stake in whitbread, prompting speculation it would push for a break-up of the FTSE 100 giant.
Barclays said it received ‘numerous requests’ from investors trying to understand the potential willingness of the board and key shareholders to engage with Sachem Head.
Barclays added: ‘we see the most “obvious” step, if any, as a sale of Costa rather than a breakup of the hotels.’
it reiterated its ‘equal weight’ rating, stating: ‘we see potential for whitbread to be a break-up story in 2018 with a sale of Costa the most imminent source of potential value creation. However, while this could bring some upside we remain cautious – given the highly uncertain UK outlook.’
Elsewhere, the FTSE 100 ended the day up 0.30pc, or 23.01 points, to 7671.11.
And the FTSE 250 also finished ahead by 0.30pc, or 62.45 points, at 20,743.90.
recruitment firm Staffline fell 3.4pc, or 34p, to 976p after revealing its sales for the full-year will miss its £1bn target.
The company, which helps get unemployed people into work, had set itself the ambitious target four years ago but said it was unlikely to reach the goal.
Despite the miss, it said it still expects sales to be about 9pc above the £882.4m it reported in 2016, while its profits will be in line with expectations.
The news pushed recruitment firms Hays down 2.6pc, or 4.7p, to 178.6p, and PageGroup lower by 4.5pc, or 20.6p, to 442.8p.