Ocado surges on Amazon bid speculation

(Sharecast News) - Ocado surged on Thursday amid speculation it could be a takeover target for Amazon. According to The Times, there has been talk the London-listed online supermarket is being eyed up by technology heavyweights such as Amazon. It was understood that Amazon could be looking at an 800p-a-share takeover bid, with Goldman Sachs and JP Morgan acting for the bidders.

Victoria Scholar, head of investment at Interactive Investor, said: "Ocado has fallen out of favour with investors lately, trading down 40% over the past 12 months even after today's jump, attracting potential opportunistic interest from parties looking to pounce on its depressed share price.

"It was a stay-at-home stock market winner during the pandemic with shares surging in 2020, however the economic reopening ever since has prompted a downward trendline to emerge with many investors unwinding their holdings.

"In February its full-year losses mushroomed to $604 million, below analysts' expectations, despite its joint venture with Marks and Spencer and its US partnership with Kroger as cost-of-living pressures on the consumer as well as elevated cost inflation and expensive energy bills take their toll."

At 0915 BST, the shares were up 19.7% at 514.60p.