(Source: Daily Mail)
By Geoff Foster, Daily Mail, London
Nov. 26--The prize for the worst performing initial public offering of 2010 could
easily go to Ocado.
Shares of the online grocer were floated at 180p in July and soon sold
down to a low of 121p amid growing concern about the business model and its
total reliance on Waitrose, part of the John Lewis Partnership.
But growing takeover speculation has since prompted a revival and
yesterday the shares rose 5.7p, or 4.1pc, to 144.7p on mouthwatering gossip
that Wm Morrison (2.1p up at 274.1p) is lining up a knock-out cash bid for the
company.
Ocado has upped its game recently. Back in October it exchanged contracts
to acquire a 35.2 acre site at Birch Coppice Business Park, Dordon, North
Warwickshire, on which it plans to construct a 350,000 sq.ft distribution
centre. The site will double the potential capacity of the business.
Broker Prime Markets says as Ocado continues to grow and develop its
business, it will move increasingly into focus as a potential takeover target
for the big four supermarkets.
Numero uno supermarket group Tesco, whose online offering leads the field
by a country mile, advanced 8.95p to 429.15p. Philip Clarke, Tesco's
international boss who takes over the helm from Sir Terry Leahy next year, has
this week waxed lyrical about the group's extensive Chinese expansion plans.
Clarke told analysts on a visit to China that he plans to quadruple sales
in China to UKpound4bn within five years. He wants to double the number of
supermarkets in China to more than 200 and develop 50 shopping malls by 2015.
Hope for a bumper Christmas trading season lifted J.Sainsbury 7.2p to
365.4p. With Wall Street closed for Thanksgiving Day, dealers in London were
left to their own devices. They chose to selectively buy blue chips which
helped the Footsie advance 41.83 points further to 5,698.93. The FTSE 250
added 103.94 points more to 10,835.04. Fund managers still fancy a traditional
pre-Christmas rally and are confident that the first-quarter of 2011 will see
a boom in merger and acquisition activity.
Leisure giant Whitbread rose 51p to 1751p as UBS added the stock to its
preferred investment list.
Marks & Spencer rose 9.1p to 384.2p after broker Arden Partners upgraded
to buy from neutral. Reports of a pending bullish broker circular lifted
Jupiter Fund Management 17.2p to 293.4p.
Buying in expectation of a bullish AGM statement today helped Hargreaves
Lansdown add 5.5p to 500p. Co-founding director Stephen Lansdown last month
sold 13.5m shares at 429p. All of the stock was placed in safe hands.