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Ocado placing under pressure

The placing of Ocado shares, the Internet grocer, is this evening balanced on a knife edge with news that just 80% of the shares on offer have been taken up by investors. However, there are still 24 hours in which investors can apply for shares in the offer and the company is still confident the sale will proceed and be priced between the £2 and £2.75 a share indicative range. We should hear over the next 24 hours as to whether the deal will be completed and will go ahead.

If the Ocado deal is cancelled at the last minute this will effectively kill the UK new issues market overnight and we will see a number of companies shy away from new equity issues. It is not the quality of these companies which is being questioned but the strength of the UK stock market and indeed UK investor appetite for new issues. It will come as no surprise to learn that new issues are struggling to succeed in the current environment and may indeed struggle for some time to come.

While the UK stock market itself has rebounded from last week's lows there are still concerns regarding the economic background and investor confidence.

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