Deliveroo Shares Soar After $3.6 Billion DoorDash Takeover Bid
Shares in Deliveroo jumped as much as 18% on Monday after the British meal delivery company revealed it had received a $3.6 billion cash takeover offer from U.S. rival DoorDash. Deliveroo said it was "minded to recommend" the 180 pence-per-share bid to shareholders, although the full terms of the deal still need to be agreed. Trading opened with Deliveroo shares around 171 pence, their highest since early 2022 but still well below the 390 pence seen at its 2021 IPO.
The takeover would give DoorDash access to 10 new markets, including Deliveroo’s biggest – Britain and Ireland – where it competes with Just Eat and Uber Eats. Analysts say the deal could help DoorDash expand globally, while Deliveroo’s founder and CEO Will Shu stands to pocket over £170 million from the sale. Following the news, Deliveroo has suspended its £100 million share buyback program that launched last month with immediate effect.
The proposed deal is not expected to face regulatory hurdles, but it’s a setback for the London Stock Exchange, which has struggled to retain tech firms. "If the deal is done at that price, the company will fail to shake off the 'Floperoo' tag it was saddled with after its disastrous IPO debut," said Hargreaves Lansdown’s Susannah Streeter. Despite recent progress toward profitability, Deliveroo still faces tough competition and the loss of another major tech listing would be "unappetising" for the UK government.
