Shares in Ocado Group surged by over 40% after The Times newspaper reported speculation of possible bid interest in the online supermarket and technology group.
The Times noted there was talk of bid interest from more than one U.S. suitor including tech heavyweight Amazon, pondering the merits of an offer 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.
'Finding Value'
"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.
Biggest One-Day Jump
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 has been a popular stock for short sellers.
In February, Ocado reported a £501 million (€581.9 million) full year loss as it took a big accounting charge and profits at its joint venture with Marks & Spencer were wiped out, as even its typically more affluent shoppers feel the squeeze from higher inflation and energy bills.
Analyst Viewpoint
Elsewhere, Orwa Mohamad, analyst at Third Bridge, described Amazon and Ocado as "somewhat of a natural fit from a fulfilment point of view. One thing Amazon suffered from in the US with Whole Foods acquisition is integrating the supply chain. With Ocado, they don’t have to do everything from scratch as it’s a modern and compatible supply chain and fulfilment process.
“Such a move will get Amazon Fresh into more households, and that’s a very important thing. However, a physical takeover of some sort may still be required to achieve real organic growth.”
Read More: Ocado Retail Keeps Profit Guidance After Quarterly Sales Rise
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