Ocado - comment

Ocado seem to be coming closer to an agreement with M&S. We understand that the company withdrew its £191m claim against the retailer. What we are reading is mostly overwritten. Ocado does not need £191m in court; it needs M&S locked into the warehouse network for the next decade. The JV is worth £500m to Ocado on our numbers — 30% coverage of the bonds. However, the financial terms of any broader settlement or new arrangements remain unclear. We are still long Ocado and are looking to exit in favour of a more convex opportunity.