Food delivery service Deliveroo surges following $3.6B proposed takeover offer from DoorDash

Shares of Deliveroo, the London-based food delivery service, have surged to three-year highs on Monday following a $3.6 billion proposed takeover bid from DoorDash. Deliveroo made the announcement after European markets closed on Friday, revealing the suspension of a previously announced $133.5 million share buyback. The company’s board has indicated its willingness to recommend the bid to shareholders if a firm offer is made at the specified financial terms. Talks between Deliveroo and DoorDash are underway, with DoorDash having until May 23 to finalize its decision on a potential buyout offer.
This move comes on the heels of Prosus’ recent acquisition of Just Eat Takeaway.com for 4.1 billion euros, which expanded its food delivery presence in Europe. DoorDash, currently operating in the U.S., Canada, New Zealand, and Australia, aims to strengthen its European footprint through this potential deal with Deliveroo. Deliveroo, established in 2013 and operating in 10 global markets, turned a profit for the first time last year. Delivery Hero, having divested its minority stake in Deliveroo in January 2024, has cooperated with Deliveroo by acquiring some of its Hong Kong assets earlier this year.
Ronald Josey of Citi Investment Research noted DoorDash’s interest in Deliveroo, citing potential benefits in terms of geographic expansion and market growth. Deliveroo’s stock saw a significant increase of over 17% on the London Stock Exchange on Monday.