Delivery Hero shares soared 12%. Will Uber raise rates to buy out a competitor?

Bonds of the owner of the food delivery service Delivery Hero rose by more than 12% in trading on Monday, Ma. 25, and reached the maximum for almost 1.5 years. The occasion was the publication of the Financial Times that Uber may increase its offer to buy the company. Interest from the American giant has already raised the value of Delivery Hero securities almost twice, but so far Uber has not succeeded.

Shares of Delivery Hero jumped 12.7% in trading in Frankfurt, Germany, reaching €37.85 at the peak. This is their highest value since the end of 2024, Reuters notes.

Uber's board of directors on Ma 23 discussed the possibility of increasing the amount of its offer to buy Delivery Hero, the Financial Times reported on Ma 24. The delivery service had previously confirmed Uber's purchase offer at a valuation of more than €10 billion (€33 per share). But, according to FT's sources, it was rejected. In addition, as the newspaper writes, Uber discussed with one of the largest shareholders of Delivery Hero deal already at €38 per share (which implies a valuation of the entire service at €11.5 billion), but also received a refusal. According to the FT, a number of Delivery Hero shareholders expect a price above €40 per share.

Uber did not respond to Reuters' request for comment. Delivery Hero was limited to Saturday's announcement of Uber's €33-a-share offer. Uber is Delivery Hero's largest shareholder after increasing its stake in the German company from about 7% to 19.5% of outstanding shares in early Ma.

Offers to buy out Delivery Hero may also come from other competitors, Bloomberg notes. Earlier DoorDash showed interest in the Middle East business of Delivery Hero, known as Talabat, the agency writes. Any potential buyer would have to consider the position of several major shareholders, Bloomberg emphasizes. Investment firm Prosus holds nearly 17% of the delivery service's shares. Aspex Management - an activist investor who secured the departure of co-founder Niklas Estberg and advocated for further asset sales - owns more than 14%.

Jefferies analysts in a note to clients pointed to "many antitrust issues to be resolved" as Uber and Delivery Hero's businesses overlap in 22 markets, nine of which are in Europe, Reuters writes.

"We believe that the company's reasonable value is markedly above €40 per share and can be arrived at either through a business split or an offer to buy the whole company," Bloomberg quoted a note by Barclays analysts as saying. At the same time, they note that any deal would raise serious antitrust issues, especially in the European Union. This adds uncertainty to the prospects of completing the takeover bid.

According to FactSet, of the 17 analysts tracking Delivery Hero shares, nine of them advise to buy, six advise to hold, and two recommend to sell. Investment banks did not predict such an upsurge in the price of securities of the German food delivery service: the Wall Street consensus estimate is €29.9 per Delivery Hero share, which implies a decline of more than 12% from the closing price of trading on May 22.

This article was AI-translated and verified by a human editor