Ocado has priced its IPO at the bottom end of its revised price range after investors baulked at the original valuation.
Ocado has revealed the offer price is 180p. Yesterday it lowered its price range to between 180p and 200p, below its original target of between 200p and 275p.
The etail grocer said it has raised £200m from the sale of new shares at 180p. It will have a market cap of £937m when conditional dealing in its shares starts today on the London Stock Exchange at 8am. Trading on the main market and the start of unconditional dealings is expected at 8am on July 26.
The company said its backers - including the John Lewis pension fund - have sold over 85 million shares, worth £154m - slightly less than initially expected. It also confirmed that chief executive Tim Steiner has not sold any shares, as it is understood he believes the shares are worth more.
Steiner said: “We are delighted with today’s news. We have had extremely positive reactions from investors in the UK, Continental Europe and the US and the fact that our IPO completed successfully in very difficult markets is an endorsement of the long-term growth potential offered by Ocado.
”I am looking forward to entering the next phase of growth at Ocado and creating more new jobs and opportunities for Ocado people.
”I am delighted to welcome a range of blue chip investors to our register, joining many of our existing shareholders who have chosen to remain with us. Our customers and employees have been an essential part of the Ocado story to date, and I want to take this opportunity to thank them.”
Ocado’s flotation has divided the City as many believed the original valuation, of between £800m and £1.2bn, was too high as the company has not yet made a pre-tax profit. The sale at 180p is still higher than many brokers and investors thought the company was worth. Some said it is worth no more than £500m.