MARKET REPORT: Deliveroo acquisition stalls… but another one is on the way

Deliveroo shares have received a boost as they become the latest London-listed company to be targeted for a takeover.

The food delivery group, nicknamed ‘Floperoo’ after its disastrous stock market float in 2021, rose 7 percent in early trading amid reports it has approached rival Doordash, based in San Francisco.

However, discussions, which began last month, ended after a disagreement over price, according to Reuters.

But analysts at Jefferies said this “may just be the beginning” and could open the door to greater interest in a Deliveroo acquisition, adding: “Such is the strength of the financial, industrial and strategic logic of a Deliveroo acquisition.” , we wouldn’t be surprised to see similar headlines resurface in the short term.

“In our view, the key to unlocking a recommended offering from Deliveroo is understanding the sensibilities of founding CEO Will Shu.”

Deliveroo, co-founded by Shu and Greg Orlowski in 2013, listed in London to much fanfare at 390 pence per share in 2021, valuing it at £7.6bn.

But the stock plummeted below 80p the following year and, although it has recouped some of its losses, it is still worth just £2.1bn.

After a sharp rise in early trading, its shares ended the day up just 1.5 pence, or 1.2 per cent, at 129 pence.

Deliveroo is just the latest London-listed company to be targeted by foreign bids in what has been called a “feeding frenzy” of acquisitions.

Other targets that have been attacked so far this year include Royal Mail owner International Distribution Services, mining giant Anglo American and drinks group Britvic.

The FTSE 100 was down 22.46 points, or 0.3 per cent, at 8,225.33, while the FTSE 250 was down 65.33 points, or 0.3 per cent, at 20,298.1.

Rising copper prices pushed miners higher, with Rio Tinto gaining 28p, or 0.5%, to 5,267p. Airline shares were under pressure, with Easyjet falling 5.8 pence, or 1.2 per cent, to 457.8 pence, while British Airways owner International Consolidated Airlines fell 4.3 pence, or 2.6 per cent to 163.8 pence.

Shares in magazine publisher Future, whose titles include Money Week, Country Life and Four Four Two, rose 83p, or 8.3 per cent, to 1,086p, following an improvement in the City.

Analysts at Jefferies raised their price target for the future shares to 1,280p from 635p and gave a “buy” rating to the stock.

Aston Martin shares initially rose after it unveiled a limited-edition Valiant sports car and said it would begin deliveries in the fourth quarter, but fell later in the day, eventually losing 4.1 pence, or 2.6 per cent. cent, to 150.7 pence.

Electrical components manufacturing group Volex, backed by Nat Rothschild, reported a 26.3 per cent rise in revenue to £722m for the year to the end of March.

Profits rose 30.5 per cent to £61m. Shares in the company, which counts Apple and Dyson among its customers, fell 23p, or 6.5 per cent, to 331p.

Tool and equipment rental group HSS Hire said its revenue in the first five months of 2024 was 4 per cent higher than the same period last year. The shares rose 0.2p, or 2.7 per cent, to 7.5p.