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Ocado bullish about spring public listing

Steve Dinneen
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ONLINE grocer Ocado will launch an audacious IPO in May which could value the company at £1.2bn.

The firm, which delivers Waitrose food to doorsteps, hopes to raise an initial £160m from the flotation. This will wipe out its £55m debts and provide it with £100m to build a new distribution centre.

A source close to the company yesterday said advisers have yet to be hired by the company. But it is understood to be in talks with 10 banks, with Goldman Sachs, JP Morgan and UBS leading the chase.

The bumper flotation value would send the firm crashing into the FTSE 250.

The loss-making firm, chaired by former ITV boss Michael Grade, will try to convince investors that the business will report profits once its rapid expansion plans taper off.

In reports released by Ocado in 2008 it posted operating losses of £22.5m.

Last month the company reported an increase in sales of almost a third in the lead up to Christmas, compared with the previous year.

An Ocado spokesman declined to comment on the IPO.

The Hatfield based business is 28 per cent owned by the John Lewis Partnership pension fund. It was founded by former Goldman Sachs bankers Jonathan Faiman, Jason Gissing and Tim Steiner in 2002.

The three bankers will share an estimated £180m from the flotation.

Last week fashion retailer New Look paved the way for a string of public offerings when it announced its plans to raise £650m in a summer flotation, valuing the 603-store chain at £1.7bn. It will use the funds to clear debt and fund expansion plans.

Fashion retailer SuperGroup will be following the progress of Ocado and New Look with particular interest as it weighs up making an IPO in the summer.

Pets at Home, formerly owned by Bridgepoint also considered a summer flotation to raise funds before it was snapped up by KKR in an astonishing last-minute private equity deal worth £955m.