M&S in talks to acquire Ocado distribution centre and fleet for GBP 850m; short window to agree deal by month-end - report
03 FEB 2019
Marks & Spencer’s [LON:MKS] negotiations on a potential tie-up with Ocado [LON:OCDO] involve acquiring the British grocery delivery company’s Hatfield distribution centre and its fleet of delivery vehicles, The Mail on Sunday reported.
The purchase price of the assets being offered by Ocado is believed to be approximately GBP 850m (USD 1.1bn), the report said, without attributing the figure to a source.
Because the arrangement under discussion involves Ocado cutting ties with Waitrose, its existing supermarket partner, talks are pressured, sources cited in the article said. The contract between Ocado and Waitrose is set to expire on 1 September next year but their contract states an 18-month break clause can be triggered by Ocado by 1 March 2019, the sources said. Any deal with Marks & Spencer would need to be hammered out during the next few weeks, as, from 1 March, it may become impossible for M&S and Ocado to do the deal, a source knowledgeable about the contract said.
Marks & Spencer's ability to transact the deal so quickly is a key issue, the item reported.
The original report appeared in print, page 94