Ocado surged to the top of the FTSE 100 on Friday as Deutsche Bank hinted at a possible buyout by Marks & Spencer.
In a research note on M&S, in which Deutsche lifted its price target on the buy-rated shares to 265p from 195p, it said: “Cash flow is no longer being squandered on an unsustainable dividend but saved to recover the investment grade credit rating that may be required to buy out Ocado.”
M&S and Ocado became joint owners of Ocado Retail in August 2019. Marks paid Ocado £750m for a 50% share of the JV, which began trading in September 2020, when Ocado’s partnership with Waitrose ran out.
At 0910 GMT, Ocado shares were up 5.6% at 1,874.50p.
