One possibility that has been muted before is a possible takeover of FTSE250 Ocado, although there is a case to be made that the numbers don't add up, that Morrisons might have to pay too much for a company that is struggling to make any profit. However, it does look like they have been talking about a "partnership" and it will be interesting to see what comes of it, although Morrisons are keen to emphasize that they have an alternative strategy that doesn't include Ocado.
Wm Morrison, Britain's fourth-biggest supermarket chain, is in talks over a partnership with Ocado that would involve utilising the online retailer's warehouse capacity and technological expertise as it plays catch-up with its larger rivals.
I have learned that Morrison's, which will on Thursday announce its intention to launch a fully-fledged online grocery business, is in detailed talks with Ocado's management team about the joint venture.
The details have not yet been finalised and the negotiations will not be completed in time for an announcement to be made tomorrow, according to insiders.
One person close to the talks said that while they had been taking place for some time, the talks might not lead to an agreement, and added that Morrison's online strategy was not reliant on striking a deal with an external partner such as Ocado.http://news.sky.com/story/1064266/morrisons-in-talks-over-ocado-venture
If the figures are bad tomorrow, Morrisons will have to impress with their future plans for expansion online. Failure to give the market something positive in that direction could see a big, negative reaction. They may not need Ocado, but they do need to go online.
Ocado up 14% so far today, Morrison around 5%. Morrison's numbers, more or less as expected, but the market seems to like the prospect, at least at face value, of the potential deal ahead. Morrison to go fully online in 2014, which seems to be a fairly generous lead time and suggests that they have been lagging somewhat and need the time to get it right.
ReplyDeleteAs often happens, the main beneficiary of potential deals like this seems to be going great guns and rising fast, Ocado up around 20%, while the other party to it that is perceived as needing it more and will have to pay for it is falling back. Morrisons now up around 2% on the day. Ocado, valued at a £billion now with no profits? The shorts must be eyeing this one up once the dust settles, as it will be a while before the two companies announce anything if they ever do. Ocado is looking way overvalued.
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