Deliveroo, a UK-based food delivery firm, has halted its £100M share buyback program after receiving a $3.6B takeover proposal from DoorDash. The offer, which suggests a premium of 22.8% per share, has led to a significant rise in Deliveroo's share price. The company is considering the proposal positively and may recommend it to its shareholders. The deal is not likely to face significant regulatory hurdles, as it would expand DoorDash’s market presence. This follows a substantial drop in Deliveroo’s shares since its launch in 2021.
Having carefully considered the Possible Offer with its advisers, the Board of Deliveroo has indicated to DoorDash that, should a firm offer be made on the financial terms set out above, it would be minded to recommend such an offer to Deliveroo shareholders, subject to the agreement of the other terms of the offer.
Deliveroo's shares have dropped almost 50 percent since they launched in 2021. This is due to a slowdown in demand for online food delivery after the pandemic, as investors are seeking more profitable companies.
According to Reuters, the deal is unlikely to face any regulatory issues because it lets DoorDash enter 10 new markets where it doesn't currently operate. This creates a complementary presence.
The offer represents a 22.8 percent premium to Deliveroo's Friday close and sent shares surging over 16 percent to 170.5 pence early Monday, reports Reuters.
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