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Amazon's Deliveroo stake to drop to 11.5per cent after London IPO

Amazon's Deliveroo stake to drop to 11.5per cent after London IPO

FILE PHOTO: A Deliveroo delivery rider cycles in London, Britain, March 8, 2021. REUTERS/Toby Melville

LONDON: will see its stake in Deliveroo fall to 11.5per cent when the British food delivery company goes public via an initial public offering, the IPO prospectus showed.

Deliveroo, in which Amazon currently has a 15.8per cent stake, began roadshows this week for its London IPO. It set a price range of between 3.90 and 4.60 pounds per share, giving it a market value of between 7.6 billion pounds and 8.8 billion pounds (US$10.46 billion-US$12.11 billion).

This includes the sale of new shares to raise 1 billion pounds and about 128.2 million shares from existing shareholders at the final price.

The prospectus said Amazon is set to shed around 23.3 million shares as part of this, allowing the tech group to raise between 90.87 million and 107.18 million pounds from the deal.

This, along with the dilution from the issue of new shares, will see its stake fall to 11.5per cent.

"We congratulate Deliveroo on their IPO and can confirm that on completion of the IPO, Amazon will still own a large proportion of our pre-IPO minority stake," a spokesperson for Amazon told Reuters.

Amazon raised its stake in Deliveroo to 16per cent last year in a transaction that had to be cleared by the UK's competition watchdog.

The U.S. company also participated in a US$180 million private funding round in January that valued Deliveroo at more than US$7 billion.

Other selling shareholders in the IPO include Index, DST, Greenoaks, Bridgepoint and Accel.

Deliveroo founder Will Shu is retaining his 6.3per cent stake, but will have 57.5per cent of the voting rights of the company because of a dual-class share structure.

The structure, which is relatively new to London, has meant that Deliveroo is aiming for a standard London Stock Exchange listing as opposed to a "premium" listing that gives companies access to the FTSE indices.

If recommendations of a review by former European Commissioner Jonathan Hill are implemented later this year, companies with a dual-class structure will be able to obtain a premium listing.

Deliveroo customers are allowed to participate in the IPO through a 50 million pound "community offer", a first for the London Stock Exchange.

Shares in the community offer will start trading a week after the stock market debut, when "unconditional" trading begins on April 7, while, institutional investors can begin trading the shares on March 31, the prospectus stated.


Deliveroo said in the prospectus that it is involved in legal proceedings in a number of countries, as it faces challenges around the status of its drivers as independent contractors.

"The independent contractor status of riders, which applies in most of the jurisdictions in which we operate, has been and continues to be the subject of challenge in certain markets, including in our key markets," Deliveroo said.

The company is engaged in such proceedings in a number of the countries in which it operates including the UK, France, Spain, the Netherlands and Italy, it said.

(US$1 = 0.7268 pounds)

(Reporting by Abhinav Ramnarayan; Editing by Rachel Armstrong, Jane Merriman and Susan Fenton)

Source: Reuters


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