German online takeaway food company Delivery Hero is offloading its minority stake in Deliveroo.
Delivery Hero has placed 68 million shares at £1.13 each with institutional investors in an accelerated bookbuilding process, the company said in a statement.
The placement underlines Delivery Hero’s commitment to 'disciplined capital allocation', it added.
The shares represent approximately 4.5% of Deliveroo’s entire Class A share capital.
The placement is expected to settle on 1 February 2024, the Berlin-based company noted.
Following settlement, the Delivery Hero will not hold any remaining shares in Deliveroo.
In November of last year, Delivery Hero raised its full-year outlook slightly, after reporting a better-than-expected gross merchandise value (GMV) for the third quarter.
Analyst Comment
According to an analyst note from Shore Capital, a large part of the European food delivery market debate has been around consolidation, with the key catalyst for Deliveroo being April, when the CEOs golden shares expire.
In addition, investors may infer that the choice to dispose of Deliveroo shares indicates that the strategic review of South-East Asian assets for Delivery Hero is continuing to be sluggish.
Shore Capital added, 'DeliveryHero in our view, was one of the more plausible potential acquirers of Deliveroo, despite their balance sheet headaches, so them selling down takes a key horse out of the race and is a slight blow to the bull case, we think. That said, DoorDash may use the opportunity to move in, in which case the M&A premium would likely stay a part of the debate.'
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