Deliveroo halts buyback as Shu in line for £172m – Daily Business

Will Shu, founder and chief executive of food delivery service Deliveroo, could net £172 million in a £2.7 billion takeover likely to be backed by shareholders.

The company this morning suspended its £100 million shares buyback programme that was announced on 18 March after receiving a possible cash offer from US rival Door Dash.

Deliveroo’s board said on Friday after the market closed that it would be “minded to recommend” a takeover proposal from Door Dash, which valued the group at 180p a share.

Door Dash has been granted access to Deliveroo’s books and has until 23 May to decide whether or not to formalise an offer.

In a statement on Friday Deliveroo said that there was “no certainty that any firm offer” would be made and advised shareholders to take no action.

At the proposed price, Mr Shu would receive a payout of more than £172m, based upon his 5.9% stake. He raised £14.8m in September after selling about 9.4 million shares to “cover personal property investments”.

The proposed offer value is well below its 390p flotation price in 2021. It was the largest in London for a decade but the shares slumped by about a quarter on the first day of trading. Investors who bought into the IPO, and stayed in, are sitting on paper losses of about 62% based on Friday’s 146.5p closing price.

Deliveroo was founded in 2013 and Mr Shu, 45, is one of its largest shareholders. Amazon is the biggest with a stake of 13%.

While its popularity soared during the pandemic, when people were forced to stay at home, it did not record a pre-tax profit until last year.

The company now ­operates in ten markets, with 140,000 delivery riders and partnerships with about 180,000 restaurants.