By Elena Vardon
Shares in Ocado soared 43% on Thursday topping London’s blue chip index following reports that U.S. tech giants might be considering a takeover bid of the U.K. online grocer and retailer.
At 0923 GMT, shares were up 187 pence at 617 pence.
Analysts attribute the chatter around a potential bid to the company’s share price decline. “Ocado has fallen out of favor with investors lately,” interactive investor head of investment Victoria Scholar says, noting this is potentially attracting opportunistic interest from parties looking to pounce on its depressed share price.
The stock had lost around a third of its value since the start of the year to Wednesday’s close. It pared losses on Thursday morning as shares surged, regaining almost all their losses year to date.
“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,” AJ Bell head of financial analysis Danni Hewson said in a market comment.
Hewson adds that Ocado shareholders may be open to a bidder putting them out of their misery as the group’s hopes of becoming an online groceries partner to businesses across the globe have only had limited success.
Ocado and Amazon U.K. didn’t immediately respond to requests for comment.
Write to Elena Vardon at [email protected]
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