City Talk: Move into the Channel

Owned by John Lewis, Waitrose, the upmarket grocery retailer, is expanding its supermarket empire to the Channel Islands. Waitrose is buying five stores from Sandpiper, the local grocery retail chain. Three of the stores are in Jersey and two in Guernsey and have traded under the Safeway and Checkers brand names.

The stores will be taken over and rebranded by Waitrose early next year. The 480 Channel Islands staff will automatically become John Lewis' employees and will share in its employee bonus scheme.


Ocado in £400m flotation



Online grocery delivery group Ocado is selling £400m-worth of shares in its UK stock market debut. The price tag for the group is £900m-£1bn. Ocado is to issue £2m of new shares and anticipates that existing shareholders former Goldman Sachs employees and the John Lewis Partnership (which has a 27% share stake) will also sell £200m-worth of shares in a secondary offering. Shares will be offered to institutional investors, Ocado employees and customers who have spent £300 with Ocado so far this year.

Ocado is to use £45m of the new capital to pay down debt and also plans to build a second distribution centre. Results for Ocado for the 24 weeks to 16 May revealed a near 30% jump in revenue to £230m and a 181% rise in earnings before taxes and interest.



Sainsbury's board shuffle



J Sainsbury has announced that Darren Shapland, its finance director, is taking on the role of development director. Dealers reckon Shapland will eventually succeed Justin King as chief executive.



Tesco perceives optimism



Richard Brasher, who is to take up the position of head of Tesco's UK business next spring after Sir Terry Leahy, the long-time Tesco boss, made the surprise announcement that he is to leave in March next year reckons there is now a greater sense of optimism around the consumer economy than there has been for some time. This optimism is spreading, despite the prospect of higher taxes and public spending cuts. Brasher said that if shoppers continue to be given value for money, they will buy.



Tchenguiz abandons fight



Property investor Robert Tchenguiz has dropped his fight against collapsed Icelandic bank Kaupthing over £137m worth of proceeds from the sale of his stake in supermarket group Somerfield. Kaupthing claimed a right to this cash 13 months ago, because the former billionaire had pledged it as collateral against a massive loan.

After the bank began to call back its loans in 2008, Tchenguiz launched legal action to prevent the money being seized. The case was due to be heard last week, but the two parties have now settled out of court.

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