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Ocado shares surge on Amazon bid rumors.

ReutersJune 22, 2023

LONDON (Reuters) – Ocado Group Shares Surge by Over 40% on Possible Bid Interest

The Times newspaper has reported speculation of possible bid interest in Ocado Group, the online supermarket and technology group. This news has caused the company’s shares to surge by over 40%. The report suggests that there is talk of bid interest from more than one U.S. suitor, including tech heavyweight Amazon. The potential offer is said to be worth 800 pence per share.

Ocado declined to comment on either the stock’s rise or The Times report. Amazon also declined to comment on the report.

“The shares have been about as flat as an open bottle of lemonade since the pandemic but third parties, including reportedly Amazon, may still see value in the brand, technology, and infrastructure,”

said AJ Bell head of financial analysis Danni Hewson.

“Ocado’s hopes of becoming an online groceries partner to businesses across the globe has only had limited success and shareholders may be open to a bidder putting them out of their misery,” she added.

Shares in Ocado rose as much as 46.7% and were briefly on track for their biggest one-day jump on record. They were last up 35%, paring losses over the past 12 months to 26%.

Analysts at Jefferies noted that Ocado’s share price has struggled post-pandemic and with about 14% of its free float out on loan, it has been a popular stock for short sellers.

In February, Ocado reported a 501 million pound ($640 million) full-year loss as it took a big accounting charge and profits at its joint venture with Marks & Spencer were wiped out. This was due to even its typically more affluent shoppers feeling the squeeze from higher inflation and energy bills.

($1 = 0.7824 pounds)

(Reporting by Danilo Masoni, James Davey, and Muvija M; editing by Mike Holden and Susan Fenton)

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