Just days after celebrating its first quarterly profit, shares in Ocado plunged as the John Lewis Partnership's pension fund sold its remaining stake in the online grocer.
The £152m disposal was handled by Goldman Sachs, which placed the stock with new and existing institutional shareholders at a price of 265p. The sell-off resulted in a sharp fall in Ocado's shares, which finished the day down 33.3p at 251.7p. They had been trading at close to all-time highs.
In a terse statement to the London Stock Exchange, Ocado insisted that the "the sale does not affect the existing commercial arrangements between Ocado and [John Lewis subsidiary] Waitrose". It added: "The sale is being undertaken by the John Lewis Partnership Pensions Trust as part of its investment management activities. Further announcements will be made in due course."
However, the move still sparked speculation that the two firms will in future have a far more distant and competitive relationship. Ocado recently signed a new sourcing arrangement with Waitrose which will last until 2017; the agreement also contains restrictions on the expansion of its own brand range.
The company – founded by three Goldman Sachs bankers – admits that its "reputation and brand is based, at least in part, on its relationship with Waitrose and John Lewis".
However, Waitrose also operates its own online store together with a click-and-collect service that enables its customers to buy online and then pick up their shopping in-store.
Online orders via Waitrose for delivery within the M25 currently have to be handled by Ocado, but that restriction comes to an end in June, although Waitrose is not particularly well represented in the London area, which is the heartland of Ocado's business.
Yesterday Mark Price, the managing director of Waitrose, said only: "We look forward to continuing our strong relationship with Ocado through our 10-year servicing agreement."
While the pension fund had long been expected to sell at least part of its stake after the expiry of a lock-in imposed at the time of the company's flotation in July, the fact that it has offloaded the entire 10 per cent in one go raised eyebrows in the City. Some even went as far as to suggest that it resulted from concerns about Ocado's long-term profitability.
Despite the profit in its final quarter, Waitrose still made a loss for the year as a whole. Nonetheless, its shares have soared recently, more than doubling in value from the 123p nadir they hit after the controversial flotation, when they were priced at 180p. The shares were transferred to the pension fund by John Lewis in November 2008 at 120p, meaning that the fund will benefit from a significant windfall.
Analysts said that although they were surprised that the pension fund had not retained even a small stake, they still expected the companies to hold a relatively close relationship, not least because the presence of either one of them in a market has typically facilitated growth for the other.
Sam Hart, retail analyst at Charles Stanley, said: "It's a slightly opportunistic move. The shares have been performing really quite strongly. You wonder if they [the John Lewis pension fund] might have some doubts about the long-term prospects of Ocado and its model."
Nick Bubb, a retail analyst at Arden Partners, said: "This has all been a bit of a saga. It was always expected that they would sell some of their stake after the results. But I'm a bit surprised they sold all of them.
"I would have expected them to keep at least a small stake.But Waitrose doesn't have many stores in London to do in-store pick-up and home delivery, for example. Both companies still need each other."