November 7, 2008 / 10:19 AM / 10 years ago

UPDATE 2-John Lewis moves Ocado stake to pension fund

* John Lewis says Ocado stake valued at 128 mln pounds

* Transfer to pension fund will reduce any funding deficit

* New branding and sourcing deal with Ocado

(Adds detail, comments from Ocado spokesman)

LONDON, Nov 7 (Reuters) - Britain’s John Lewis Partnership, the employee-owned retailer, said on Friday it had transferred its 29 percent stake in online supermarket Ocado to the John Lewis Partnership Pension Fund. It said the transfer of the holding, independently valued at 128 million pounds ($200.8 million), would reduce any future funding deficit. The valuation gives the whole of Ocado a value of 440 million.

John Lewis, which owns 27 UK department stores as well at the 193-store Waitrose supermarket chain, also agreed a new five-year branding and sourcing deal with Ocado.

It said Waitrose’s management can now focus on the continued expansion of its other online activities — Waitrose Deliver and Waitrose Entertaining.

“We believe that now is the right time for us to simplify and clarify our relationship with Ocado,” said John Lewis Chairman Charlie Mayfield.

“The structure of the transaction ... is an effective way of achieving that while still allowing our Partners to benefit from any future increase in Ocado’s value.”

A spokesman for Ocado said its management welcomed the new deal.

“They’re very delighted with it because it shows a vote of confidence in the future of the business,” he said.

“The five-year deal is renewable so its not necessarily the end of things after five years.”

Ocado was launched in partnership with Waitrose in 2002.

The three former Goldman Sachs bankers who founded Ocado still own 22 percent of the equity. The rest is held by UBS, Goldman Sachs and some private investors.

For the year to Dec. 31 2007 Ocado reported a loss before interest, tax, depreciation and amortisation of 11.5 million pounds. This compared with a loss of 22.7 million pounds in the previous year.

The spokesman said the company has traded profitably at the EBITDA level since November 2007.

Earlier on Friday, John Lewis, which is seen as a barometer of British retail spending, published its weekly sales data. [ID:nL7598108] (Reporting by James Davey; Editing by Jon Loades-Carter)

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