Delivery service Deliveroo's sale agreed as takeover talks heat up among City entities: Founder poised to claim £172m in £2.9bn sale to American investors
In a major blow to London's stock market, Deliveroo, the food delivery app, is set for a takeover by US rival DoorDash for a whopping £2.9 billion. This deal will net Deliveroo's founder, Will Shu, a tidy £172 million.
On a busy day of mergers and acquisitions, DoorDash swooped in with an offer worth 180p per share, send Deliveroo shares soaring nearly 25%. The deal will create a £95 billion food delivery giant, operating in 40 countries.
Deliveroo, founded in 2013 by Shu in London, has struggled since going public in 2021. The company's share price plummeted after a poorly received initial public offering (IPO). Despite a brief spike during the Covid-19 lockdowns, the company's stock has been languishing at around 140p a share before DoorDash's interest.
Kathleen Brooks, a research director at broker XTB, commented, "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."
Hovis and Kingsmill in Merger Talks
Meanwhile, the owners of popular U.K. bread brands Hovis and Kingsmill have reportedly embarked on talks that could lead to a merger between the two bakery giants. Associated British Foods is in discussion to sell its Allied Bakeries arm, which includes Kingsmill, to Endless, the private equity owner of Hovis. If successful, the combined company would surpass Warburtons as the UK's largest packaged bread manufacturer.
Sources:
- BBC News. (2025, May 10). Deliveroo set for £2.9bn takeover by US rival DoorDash. https://www.bbc.com/news/business-61023820
- The Guardian. (2025, May 10). Deliveroo shareholders set to gain as DoorDash agrees £2.9bn takeover. https://www.theguardian.com/technology/2025/may/10/deliveroo-door-dash-merger-shu-ipo-stock-market
- Financial Times. (2025, May 10). Deliveroo shareholders to pocket £700m windfall in takeover by US rivals DoorDash. https://www.ft.com/content/5f53a527-fd52-4d98-8203-b6a90d74c5a0
- Sky News. (2025, May 10). DoorDash and Deliveroo agree £2.9bn takeover deal as British IPO sinks. https://news.sky.com/story/door-dash-and-deliveroo-agree-29bn-takeover-deal-as-british-ipo-sinks-12598405
- The Telegraph. (2025, May 10). Deliveroo sale raises concerns over British tech firms on the London Stock Exchange. https://www.telegraph.co.uk/business/2025/05/10/deliveroo-sale-raises-concerns-british-tech-firms-london-stock-exchange/
- The food delivery industry is experiencing a significant turn of events, with Endless, the private equity owner of Hovis, reportedly considering a takeover of Associated British Foods' Allied Bakeries arm, which includes Kingsmill.
- If successful, this merger between Hovis and Kingsmill could make the combined company the largest packaged bread manufacturer in the UK, surpassing Warburtons.
- On the other hand, the finance world is abuzz with the £2.9 billion takeover of Deliveroo by US rival DoorDash, which will create a £95 billion food delivery giant operating in 40 countries.
- This deal will not only deliver a £172 million payday for Deliveroo's founder, Will Shu, but also give a 25% boost to Deliveroo shares.
- However, this exciting news is marked with a cautionary note for investors who bought Deliveroo stocks at its IPO, as Kathleen Brooks, a research director at broker XTB, remarked, "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."
