Deliveroo sees huge shares jump after £2.8billion takeover offer from US firm
A TAKEOVER offer of £2.8billion has lifted Deliveroo shares to their best day on the stock market.
The takeaway delivery service — once called the “worst listing in history” — saw the jump after saying it was minded to accept a rival’s approach.
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Deliveroo on Friday night signalled a deal with goliath US service Doordash would go ahead, following almost a year of on-off talks.
Shares in the British firm yesterday rallied 23.4p higher — or 16.6 per cent — to 170.9p, which would value the business at £2.56billion.
It is thought that a deal valuing Deliveroo’s shares at 180p each in cash will be confirmed later this week.
At that price, its founder and CEO Will Shu will land a £172million payday for his remaining shares.
Just two months ago, Mr Shu quashed rumours he had plans to step down.
He may choose to stay with the prospective combined business.
It is understood that the Deliveroo brand name will not be leaving the UK.
DoorDash previously kept the name Wolt going in Europe and Asia after its takeover of the Finnish delivery service back in 2022.
The Deliveroo takeover marks the end of a City rollercoaster for the firm, and shows how DoorDash and its British counterpart — which have strikingly similar beginnings and business models — saw very different fortunes.
They were both started in 2013 by entrepreneurs, and floated in 2021 on the back of the global Covid pandemic sparking a surge in demand for online food deliveries.
But while DoorDash has grown to operate in 30 countries to be now worth £58billion, Deliveroo has only just turned a £3million maiden profit and has been exiting some international markets.
Deliveroo won back some confidence lately after broadening from just takeaways to retail deliveries with tie-ups with supermarkets, B&Q, and even Ann Summers.
But it has never lived up to its £7.6billion stock market valuation from its initial listing in 2021.
Despite being hailed by then-Chancellor Rishi Sunak as a “true British tech success story”, its shares lost 30 per cent of their value within the first few days, and it never recovered.
The failure was blamed on poor timing as lockdowns eased, as well as the growth of rivals.
There were also concerns over its zero-hour contracts model.
The deal with DoorDash follows similar negotiations at other takeaway firms.
In February, Just Eat was acquired by investment group Prosus for £3.5billion.
BUSINESS ANALYSIS
AROUND 100 years ago, food deliveries by bike were common.
That’s how Greggs started — with founder John Gregg taking eggs and yeast to Newcastle families on his pushbike.
When Deliveroo started in 2013, cynics questioned if it was just squandering millions of pounds to do the same thing.
It was hardly reinventing the wheel, they argued, even if a whizzy app meant it was considered a technology firm.
At the time of Deliveroo’s failed listing in 2021, there had just been an explosion of fast-growing rivals like Gorillas, Zapp, Uber Eats and Getir.
At the same time, the easing of lockdowns meant a fall in demand for takeaways.
A flurry of deals saw US service Gopuff shore up most start-ups, while investors at Prosus gobbled up Just Eat.
What has become clear is that food delivery tech firms need plenty of dough.
By combining with DoorDash, Deliveroo will have a better chance of keeping the wheels of its couriers’ bikes turning.
THEME BARK ON
PAW Patrol will be “there on the double” after Merlin Entertainments struck a deal for a theme park dedicated to the cartoon pups.
The leisure giant, which runs Madame Tussauds and Legoland Windsor, said it had struck a partnership with Paramount to bring the animated characters to Chessington World of Adventures in South West London.
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It will be the UK’s first Paw Patrol-themed resort with four themed rides, dedicated hotels, plus a shop for parents to spend cash on merch for the kids.
Fiona Eastwood, boss of Merlin Entertainments, said the partnership “builds on our expanding offer to families with younger children, a key audience for us as part of our future growth plans”.
Paw Patrol, which follows the adventures of Ryder and his team of heroic rescue pups ready to save the day, was first released on Canadian TV in 2013.
UK fans first got to watch it on Channel 5’s Milkshake! slot a few months later.
It has since become a successful franchise with two theatrical films.
Its most recent, The Mighty Movie, made £152million at the global box office from a budget of £22million.
FRENCH FANCY ITV
THE French entertainment giant which produces Peaky Blinders and Big Brother is said to be exploring a takeover of ITV.
Banijay Group has held early talks with ITV bosses about a full acquisition or buying just its studio production business, according to the Financial Times.
Analysts reckon ITV studios could be worth £3billion alone.
Despite the takeover interest, shares in ITV yesterday dipped by 4.3 per cent, valuing the whole business at £2.89billion.
A LIDL BIT MORE
LIDL is investing half a billion pounds in Britain this year as it sets its sights on crossing the milestone of 1,000 stores.
The discount supermarket, which already has 980 shops here, plans to open another 40 during 2025.
It also wants a new distribution centre on top of its 14 existing locations.
The chain has welcomed Government planning reforms — having previously complained about rivals blocking new stores.
Lidl’s Richard Taylor said it would aid the “kind of growth we are working towards”.
THE GOING RATES
MINISTERS are ramping up their regulators bonfire by scrapping the Valuation Office Agency, which sets business rates and collects council tax.
It will be rolled directly into HMRC from next April.
Treasury Minister James Murray said it will end inefficient duplication of agencies, plus “drive change faster and improve value for money”.
The VOA has been criticised for inaccuracies and unfairness in setting business rates.
But experts at Colliers fear politicising the VOA may cause issues for ratepayers.
RENTS outside London have hit a record high of £1,349 a month after a 0.6 per cent increase in the last quarter, according to Rightmove.
The average in the capital rose to £2,698, despite more properties coming on to the market.
HACKERS HIT M&S FOR £28M
MARKS & SPENCER has missed out on around £28million of sales since a cyber attack forced it to suspend online orders on Friday.
Hackers first targeted the retailer over the Easter weekend, initially affecting contactless payments and click and collect orders.
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But M&S paused online shopping via its website and app on Friday, which experts said showed hackers were deep in its systems.
More than £700million has been wiped off the company’s market valuation since the cyber attack started.
M&S said customer data had not been affected but it could not say when normal service would resume.
Staff are having to fulfil click and collect orders manually.
Agency workers at its warehouse in Castle Donington, Leics, were told they were not needed yesterday because there was much less “picking and packing” to be done.
A.I’LL GO TO SHOPS
CHATGPT maker OpenAI is launching a new search tool that turns its chatbot into a personal shopper.
The function will allow it to trawl the internet for home, fashion, and beauty products — and produces personalised recommendations tailored to budget and reviews.
Users can, for example, ask ChatGPT to “find a T-shirt under £30 to match my red Adidas trainers” or to find a sofa or bookshelf to fit a certain space.
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