Ocado said to have abandoned pursuit of £190m payment from M&S

(Sharecast News) - Ocado has reportedly quietly abandoned its pursuit of a £190m payment from Marks & Spencer following a dispute related to their online grocery joint venture. The Times cited sources as saying that no final payment will be made by M&S, which teamed up with Ocado in 2019 to create Ocado Retail.

At the time, M&S paid £562m upfront to buy a 50% stake in Ocado Retail. It was also due to pay a final instalment of £190.7m, contingent on the JV meeting an undisclosed performance target in the year to November 2023.

However, the partnership failed to meet the financial targets that would have triggered a final payout.

According to The Times, speculation had been growing over how much M&S would ultimately pay after Ocado reduced the fair value of the contingent payment in its accounts, while M&S valued the liability at zero.

Ocado chief executive Tim Steiner had threatened legal action if M&S refused to pay. But sources told The Times both sides had drawn a line under the dispute without any final payment changing hands.

"It's a dead duck," one person close to the situation told The Times.

An Ocado spokesperson told Sharecast: "Ocado Retail continues to be the UK's fastest-growing grocer, and we were pleased to announce in last week's half-year results that the business is now profitable across all key measures.

"We expect to build further on this momentum in the coming months by expanding order capacity for customers while maintaining strong growth. Together with our joint venture partners at M&S, we remain focused on realising the significant potential of the Ocado Retail business."

At 1353 BST, Ocado shares were up 2.6% at 189.34p, while M&S was 1.5% higher at 398p.