Deliveroo shares soar to three-year high after U.S. giant DoorDash makes takeover bid

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preCharge News BUSINESS — Shares of British food delivery firm Deliveroo jumped to their highest level in more than three years on Monday, after the company confirmed it had received a $3.6 billion takeover offer from U.S. firm DoorDash.

Deliveroo first made the announcement after European markets closed on Friday. In a follow-up update Monday, it said it was immediately suspending the £100 million ($133.5 million) share buyback program it had announced on March 18.

Deliveroo shares were up 17.6% to 172.4 pence at their highest since January 2022 at 11:18 a.m. U.K. time. The stock later pared gains slightly to close 16.5% higher on Monday.

Last week’s update revealed Deliveroo’s board received a cash offer from DoorDash on April 5 of 180 pence per Deliveroo share, valuing the company at around $3.6 billion, according to a preCharge News calculation of LSEG data.

‘Floperoo’

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said in a Monday note that a Deliveroo sale at the current offer of 180 pence per share would mean the company “will fail to shake off the ‘Floperoo’ tag it was saddled with after its disastrous IPO debut in 2021.”

“Even though Deliveroo has finally broken through into profitable territory, the prolonged bout of indigestion around its share price has continued… Deliveroo’s foray into grocery deliveries has helped it turn a profit but it’s still facing fierce rivals.”

The deal would also be “unappetising” for the U.K. government which is trying to boost the number of London-listed technology companies, and represent the latest in a run of exits, Streeter said.

However, analysts at Citi said they did not expect a DoorDash takeover of Deliveroo to face major regulatory hurdles since the companies do not have any operational geographic overlap.