Ocado offers regular shoppers shares in £1bn flotation

Hundreds of thousands of Ocado customers are to be offered the chance to buy shares in an expected £1 billion stock market flotation

Ocado bosses have today written to customers flagging up the offer to become shareholders in London's biggest online grocer if the flotation goes ahead this summer.

The City is expecting Ocado to finally "push the button" on the flotation — one of the biggest in the City since the start of the recession — within the next few weeks.

If that happens shares in the Waitrose food and drink delivery service are likely to start trading next month.

The letter from chief executive Tim Steiner says "we would like to offer Ocado customers who have spent over £300 with us in the period from 1 January 2010 to the time of announcement the opportunity to buy shares in the flotation."

Qualifying customers — the average Ocado order is £108 — will be entitled to buy up to about £12,000 worth of shares at the same price as they are offered to big City institutions.
It is expected that about 10 to 20 per cent of the total shares will be made available to customers.

Mr Steiner said his City investment banking advisers had urged him not to include customers in the flotation.

But he added: "Our customers have backed us in building the business and we very much wanted them to participate."

Ocado was founded by three former Goldman Sachs bankers in 2002 and has quickly established itself as an aspirational London brand through its Waitrose links and its highly visible delivery vans.

The founding trio — Jonathan Faiman, Jason Gissing and Mr Steiner — will own shares worth around £180 million if the float happens.
Although it has yet to make a profit, Ocado has grown rapidly and last month passed the 100,000-orders-a-week barrier for the first time.

Mr Steiner said: "Although we haven't yet made a decision on whether to proceed with the float, there has been lots of media speculation and we have had questions from customers.

"So we wanted to alert them now that it is our intention to offer current customers the chance to buy shares if we go ahead."

The offer to customers has echoes of the "Tell Sid" campaign of the Eighties when millions of ordinary investors scrambled for shares in British Gas when it was privatised.

There were similar flotations when British Telecom was privatised and when building societies such as The Halifax and Abbey National were demutualised.