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DoorDash’s Takeover Interest in Deliveroo Ends Over Valuation Dispute

 |  June 25, 2024

San Francisco-based DoorDash expressed interest in acquiring Britain’s Deliveroo last month, but talks have since stalled due to a disagreement over valuation, according to sources familiar with the matter who spoke to Reuters on condition of anonymity. Currently, there are no ongoing discussions between the two companies.

Deliveroo, listed on the London Stock Exchange, has seen its shares plummet by 68% since reaching a high of 395.9 pence in August 2021. On Tuesday, its shares closed at 127.5 pence, valuing the company at £2.1 billion ($2.66 billion). Meanwhile, DoorDash shares experienced a 2% drop to $111.68 following news of the potential takeover, though they have since rebounded, showing a 1.7% increase on the day.

The online food delivery sector has faced significant challenges post-pandemic. Demand has slowed, and investors have shifted focus towards more profitable ventures amidst rising interest rates, factors that have contributed to the decline in Deliveroo’s share value since its initial public offering (IPO) in March 2021.

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Despite these challenges, Deliveroo remains a key player in the market. The company partners with 180,000 restaurants and retail outlets and operates a network of 140,000 riders. Notably, Amazon is Deliveroo’s largest shareholder with a 13.23% stake, followed by DST Global with 7.54%, and Deliveroo CEO Will Shu holding 6.46%.

Founded in February 2013 by Will Shu and Greg Orlowski, Deliveroo made a significant impact on the food delivery industry. During the company’s 2021 listing, Shu retained additional voting power through his ownership of Class B shares, giving him 57.5% of the voting rights.

Source: Reuters