Delivery Hero, the Berlin-based food delivery group, has built a 5 per cent stake in Deliveroo, driving shares in its UK-based rival to their highest point since March’s initial public offering.
The move comes at a time of consolidation in the online food delivery industry, as companies jostle for position in new sectors such as groceries and look to capitalise on the growth boost provided by the pandemic’s lockdowns.
Shares in Deliveroo rose as much as 10 per cent to 360p on Monday morning in London, their highest point since the stock began trading in March.
Delivery Hero, whose stock was flat at €131.50, already owns minority stakes in several other food delivery groups around the world, including Europe’s largest player, Just Eat Takeaway.com, Spain-based Glovo and Latin America’s Rappi.
Delivery Hero competes against Deliveroo in the Middle East through its Talabat brand, and in Hong Kong and Singapore via its Foodpanda unit.
But the two companies do not overlap in Deliveroo’s largest market, after Delivery Hero struck a deal in 2016 to sell its UK operations, Hungryhouse, to Just Eat for about £200m.
The move initially left analysts stumped. “It is hard to say with conviction at this point what Delivery Hero’s intention is,†said Giles Thorne at Jefferies.
Deliveroo declined to comment. Delivery Hero said it was “always looking for new investment opportunities†and that it strongly believed “in the future potential of the delivery industry as a whole.†Both companies are set to update investors on current trading this week.
Deliveroo’s shares are yet to return to the 390p price at which it launched its IPO but the stock is now up by more than 15 per cent over the past month following an upgrade to its growth forecasts on July 8.
The dual-class share structure that riled some investors in the run-up to Deliveroo’s IPO means that Will Shu, chief executive, is able to block any takeover attempt over the next three years.
Delivery Hero’s largest investor, Prosus, increased its stake in the company to about 25 per cent in March. Prosus, the investment arm of South Africa’s Naspers, has made significant investments in food delivery businesses, including India’s Swiggy, Finland’s Wolt and the recently launched German grocery app Flink.
