An investment firm backed by the Agnelli family of Italy and chaired by former UK Chancellor of the Exchequer George Osborne has built a 5% stake in the online grocer Ocado Group Plc.
Lingotto Investment Management LLP disclosed the position in regulatory filings on Monday. It comes just days after Ocado’s shares surged following speculation of bid interest from technology companies such as Amazon.com Inc.
Ocado is best known for an online grocery joint venture with Marks & Spencer Group Plc but its main focus is on licensing its robotic warehouse technology worldwide. It has partnerships with retailers globally including Kroger Co. in the US and Lotte Shopping in South Korea.
Lingotto is owned by Exor NV, a holding company controlled by the Agnelli family. Exor makes investments in an array of companies and has positions in the Economist magazine, supercar-maker Ferrari and Juventus Football Club.
“There’s a price for everything and the Agnellis obviously think the present price is attractive,” said Clive Black, an analyst at Shore Capital. “It doesn’t really change what we think about the business model, and the fact they need to conserve cash at the moment and they’re heavily loss making.”
Ocado’s shares have fallen 73% in the past two years and were trading around 529 pence on Monday early afternoon. The company reported a bigger-than-expected pretax loss of £501 million ($637 million) in February.
Last month Lingotto named Osborne, who led the UK Treasury under former Prime Minister David Cameron, as chairman.
Exor has held a position in Ocado since 2017 but data compiled by Bloomberg shows it was still below 1% before the latest move. It is now the sixth largest shareholder in the company.
The investment is led by managing director Matteo Scolari who previously worked at hedge fund Eton Park, as well as McKinsey & Co. and Goldman Sachs Group Inc.
In a recent letter to shareholders, Exor’s CEO John Elkann said Ocado had caused the most harm to the fund’s performance in 2022 as Covid lockdowns lifted and shoppers returned to buying their groceries in-store.
Still, Elkann hailed Ocado’s “bold” tech innovations to reduce cost, improve flexibility and increase productivity, saying they put the company “far ahead of competition.” At the time Elkann said Scolari was adding to the position at attractive prices.
(Updates with analyst comment in fifth paragraph, context from seventh.)
Author: Deirdre Hipwell, Katie Linsell and Tommaso Ebhardt
