Deliveroo hops on IPO bandwagon with $3.3b offering
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Deliveroo is taking investor orders through March 30, with the stock set to start trading on the London Stock Exchange a day after. It is listing with two classes of shares, which will give chief executive Will Shu outsized voting rights for three years.
PHOTO: REUTERS
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LONDON • Food delivery start-up Deliveroo has started taking investor orders in a share sale worth up to £1.77 billion (S$3.29 billion), marking the largest initial public offering (IPO) in Britain since September last year.
Deliveroo is selling shares at £3.90 to £4.60 apiece, according to a statement by the company yesterday, valuing the company at £7.6 billion to £8.8 billion.
The IPO is the biggest float on the London Stock Exchange (LSE) since THG's £1.88 billion offering in September last year, according to data compiled by Bloomberg.
The company will take investor orders through March 30, with the stock set to start trading a day after, according to terms seen by Bloomberg.
Deliveroo plans to sell as many as 384.6 million shares, an amount that could rise by as much as 10 per cent if there is enough demand.
Besides the £1 billion of new shares the company aims to sell, existing shareholders will also sell stock in the IPO, the company said.
The company plans to invest its proceeds to fuel growth.
Deliveroo is coming to the market at a time when coronavirus restrictions have caused soaring demand for food delivery.
Gross transaction value - the total value of purchases on its platform - rose 121 per cent in January and February versus the same period last year, the company said yesterday, after a 64 per cent increase in 2020.
"Bringing the food category online represents an enormous market opportunity," Deliveroo said, adding that fewer than one of 21 meals a week - including breakfast, lunch and dinner - takes place online now.
121%
Increase in gross transaction value in January and February versus the same period last year.
384.6m
Number of shares Deliveroo aims to sell, an amount that could rise by 10 per cent if there is enough demand.
Its shareholders include Amazon.com, which has a 16 per cent stake, venture capital firms DST Global and Index Ventures, which own about 10 per cent each, and US mutual fund company T. Rowe Price Group with an 8.1 per cent interest.
Deliveroo is listing with two classes of shares, which will give chief executive Will Shu outsized voting rights for three years.
The offering comes after a government-backed report earlier this month made a slew of recommendations to reform British listing rules, including allowing such governance structures on the premium segment of the LSE, but it could be months before these are implemented.
The proposals are part of London's bids to retain its clout as a major financial centre in a post-Brexit world and attract fast-growth technology firms to its stock exchange.
About £4.8 billion has been raised this year in the City through IPOs, according to data compiled by Bloomberg.
Goldman Sachs Group and JPMorgan Chase are joint global coordinators on the offering, while Bank of America, Citigroup, Jefferies and Numis Securities are joint book runners.
BLOOMBERG
