Deliveroo kicks off UK’s largest IPO so far this year

LONDON: Food-delivery startup Deliveroo Holdings Plc started taking investor orders in a share sale of as much as £1.77bil (US$2.45bil or RM10bil), marking the largest initial public offering in the UK since September.

Deliveroo is selling shares at £3.90 to £4.60 apiece, according to a statement, valuing the company at £7.6bil pounds to £8.8bil.

The offering is the biggest float on the London Stock Exchange (LSE) since THG Plc’s £1.88bil offering in September, 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.The sale consists of as many as 384.6 million shares, and that amount could be increased by as much as 10% if there’s enough demand.

Besides the £1bil of new shares the company aims to sell, existing shareholders will also offer stock in the IPO, Deliveroo said, without providing details. It plans to invest its proceeds to fuel growth.

Deliveroo is coming to the market at a time coronavirus restrictions have caused soaring demand for food delivery.

Gross transaction value – the total value of purchases on its platform – rose 121% in January and February versus the same period last year, the company said, after a 64% increase in 2020.

“Bringing the food category online represents an enormous market opportunity, ” it said, adding that less than one of 21 meals a week including breakfast lunch and dinner takes place online now.

Its shareholders include Amazon.com Inc, which holds a 16% stake, venture capital firms DST Global and Index Ventures, who own about 10% each, and US mutual-fund company T. Rowe Price Group Inc with a 8.1% interest.

Deliveroo is listing with two classes of shares, which will give chief executive officer Will Shu outsized voting rights for three years.

The offering comes after a government-backed report this month made a slew of recommendations to reform UK 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 attempts to retain its clout as a major financial center in a post-Brexit world and attract fast-growth technology companies to its stock exchange.

About £4.8bil has been raised in the UK through IPOs in the first three months of the year, according to data compiled by Bloomberg, in what might end up as the busiest-ever first quarter for listings in the city.

Goldman Sachs Group Inc and JPMorgan Chase & Co are joint global coordinators on the offering, while Bank of America Corp, Citigroup Inc, Jefferies and Numis Securities Ltd are joint bookrunners. — Bloomberg

TheStar.com.my, 24 March 2021 (Wednesday)