Deliveroo’s boss will scoop £172million after a US rival bought the business for £2.9billion.
On a day of frenzied takeover activity, Will Shu’s food delivery firm accepted an offer worth 180p a share from DoorDash.
The deal sets the scene for Deliveroo to become the latest listed firm to leave London’s struggling stock market, in another blow to the City.
DoorDash’s swoop came amid mounting speculation over the future of energy giant BP with rival Shell said to be weighing a bid in what would be one of the oil sector’s biggest ever takeovers.
And Primark-owner Associated British Foods is in talks to sell its Kingsmill bakery arm to the private equity owner of Hovis.
San Francisco-based DoorDash’s takeover of Deliveroo will create a £95billion food delivery giant with operations in 40 countries.
Quids in: Deliveroo founder Will Shu (pictured) is set for a £172m windfall from the sale of the takeaway app to US rival DoorDash
Deliveroo was launched in London in 2013, making founder Shu, 45, one of the most prominent business leaders in Britain.
Most of the company’s first decade was spent as a private business but it went public in 2021.
Deliveroo shares started trading at 390p each – giving the company a valuation of £7.6billion – in a much-hyped initial public offering (IPO) on the stock market. But the share price tanked by a quarter on the first day.
The public share sale was dubbed one of the worst in history, with some analysts branding it ‘floperoo’.
Deliveroo has struggled to perform ever since, excluding a spike during the Covid-19 lockdowns when shares were boosted by a surge in demand for home deliveries.
Its shares were languishing at around 140p a piece before DoorDash’s interest in a takeover was made public last month.
Deliveroo’s stock has soared nearly 25 per cent since then and its share price added 1.9 per cent, or 3.3p, to 175.4p yesterday.
Despite its poor stock market track record, co-founder Shu, who has a 6.4 per cent stake, will walk away with millions.
Kathleen Brooks, a research director at broker XTB, said: ‘This deal is good news for short-term holders of Deliveroo shares, but it is still a blow for those who have been holding the shares since the IPO.
‘Deliveroo’s sale is the end of the road for one of the most hyped IPOs in the UK in recent memory, which ended up promising more than it could deliver.’
Deliveroo has teamed up with 176,000 restaurants and retailers, serving around 7m customers a month.
It operates in the UK, Belgium, France, Italy, Ireland, Kuwait, Qatar, Singapore and the United Arab Emirates.
Nasdaq-listed DoorDash was also founded in 2013. The company has more than 42m monthly users and has partnered with more than 500,000 businesses.
Shu said: ‘We are now at the beginning of a transformative new chapter. DoorDash and Deliveroo are like-minded organisations with a shared strategic vision and aligned values.
‘Together we will be even better positioned to serve consumers, merchants, riders and local communities. The enlarged group will have the scale to invest in product, technology and the overall consumer value proposition.’
DoorDash founder and chief executive Tony Xu said: ‘I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together’.
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