Deliveroo suspends share buyback programme amid Doordash offer
Deliveroo has suspended its £100m share buyback programme after receiving a proposal from US-rival Doordash.
The takeaway giant had unveiled the programme, which would have brought its shareholder returns to £550m since 2023, in its March full-year results.
Deliveroo said it could recommence the programme at a later date.
On April 25 the company confirmed that it had received a takeover offer from Doordash at the start of the month, in what would mark the US giant’s latest deal since acquiring Finnish delivery company Wolt for £5.2bn in 2021.
Its share price rose more than 15 per cent in early trades on Monday in response to the announcement, which occurred late on Friday.
Doordash proposed 180p per share to acquire Deliveroo a premium of more than 20 per cent to its closing price on Friday.
The proposal, which valued Deliveroo at £2.7bn, sent the company’s share price up five per cent.
However, it is just over a third of Deliveroo’s 2021 London IPO valuation of £7.6bn.
Deliveroo said it has “decided to engage in discussions with DoorDash” and would be “minded to recommend a firm offer” at 180p per share.
However, it said there was “no certainty that any firm offer will be made” and advised shareholders to take no action.
Doordash made an approach for Deliveroo last year at roughly the same time, according to the FT.
The company, which operates in nine countries – it recently exited Hong Kong – booked its first full annual profit in its 2024 results last month.
Doordash, which was founded in 2013 and is currently the largest takeaway company in the US, operates in more than 30 countries and reported revenue of £8.03bn last year. However, it does not operate in any of the same countries at Deliveroo.
Both companies have recently made efforts to push past takeaways and expand into retail partnerships, including grocery deliveries and making non-food deliveries.
Doordash has until May 23 to make a firm offer for Deliveroo.