Based in Berlin Delivery heroes now owns 87.4 million Deliveroo shares, valued at approximately £ 284 million.
The news has pushed Deliveroo’s share up nearly 10% to 357p, and will fuel speculation about a possible merger between the two amid intensive consolidation in a sector where demand has exploded in the market. pandemic.
Delivery Hero operates in 40 countries but not in Great Britain, where it sold its Hungryhouse business to Just Eat for £ 200million in 2016.
Shares of Deliveroo, led by former banker Will Shu, floated in March to 390p but slumped to 230p as investors worried about its two-class share structure and hand practices -work.
They have since started to slowly recover and are up 15% this month.
Analysts were not immediately certain of the motivation for the takeover.
Giles Thorne of Jeffries said: “It’s hard to say with conviction at this point what the intention of Delivery Hero is.”
A Delivery Hero spokesperson would simply say, “Delivery Hero is always on the lookout for new investment opportunities.
“We strongly believe in the future potential of the delivery industry as a whole and have therefore decided to buy shares in one of the companies which is at the forefront.”
Its co-founder and CEO Niklas Oestberg took to Twitter to explain that he believes the company was oversold when it went public and remains undervalued.
He said he had known Shu “for many years” and had “great respect for what he and his team have built,” adding that his group had recouped most of his participation at 270p.
Oestberg wrote: “The company is oversold on the IPO. We acquired our stake in an average EV of approx. £ 3.6bn for a company with GTV’s £ 6.6bn in the first quarter (£ 7.0bn in the second quarter) with a decent gross profit margin. We felt undervalued.
“We looked at all possible scenarios in April when we started to acquire our stake. In any case, this would not be a bad investment in the long run.
Last month, JustEat Takeaway, which acquired GrubHub last year, was criticized by activist shareholder Cat Rock Capital, who claimed he was risking a hostile takeover unless he pursued a merger with a rival most important.
Two rival groups – UberEats and DoorDash – are targeting the German national Delivery Hero market as an area of potential growth, as they seek to take advantage of expanding European demand.