City sources believe Ocado founder and chief executive Tim Steiner could be persuaded to consider a move to the States amid longstanding frustrations over the reluctance of some investors to recognise it as a bona fide technology company rather than a struggling, perennially loss-making online grocer.
An exodus of UK blue-chips to the States is being fuelled by a belief among many chief executives that their companies will command much higher valuations. The stream of exits is stoking fears that the London stock market – once the world’s premier index – is in danger of being turned into a backwater for equities.
The decision of British microchip-making champion Arm to shun its ancestral home in favour of America last year, partly in search of a more generous valuation is thought to have focused minds among some of Ocado’s shareholder base. The move was controversial because it was seen as a significant snub to the Prime Minister who had made a direct plea to Arm’s Japanese owners to re-list the company in London.
However, Softbank’s decision appeared to be quickly vindicated after its share price soared in the months after its September Nasdaq debut. The semiconductor manufacturer’s stock price had nearly trebled from $51 to $149 by February. On Friday, it was standing at $95 after a major sell-off following disappointing financial figures earlier in the week.
The decision of Paddy Power owner Flutter, plumbing giant Ferguson, cement-maker CRH, tour operator Tui and several other big names to turn their backs on the capital in some form has fuelled fears that London is locked in a death spiral. A threat by Shell to join the wave of departures sent shockwaves through the City earlier this month.
