The online grocer Ocado was forced to slash the price of its initial public offering by 20 per cent at the 11th hour yesterday after investors baulked at its valuation of up to £1.1bn.
Following an embarrassing climbdown just hours before its order deadline, Ocado chopped its price range to 180p to 200p a share. Unofficial trading in its shares will still start today, ahead of full dealing on Monday.
Ocado had previously set a price range of between 200p and 275p, valuing the business at up to £1.1bn. But the internet grocer has faced a barrage of criticism from potential investors and analysts over its valuation, which many believe should be closer to £500m. The mid-price of the latest range would value Ocado at £760m.
Founded in 2000, Ocado has never made a pre-tax profit and has burned through £350m of cash raised from investors.
Ocado also issued a supplementary prospectus yesterday. The grocer's customers who bought shares before Monday have until Friday to subscribe at the lower price. Only several thousand of its 100,000 eligible customers subscribed to the offer.Reuse content