Delivery Hero confirms advanced negotiations with Uber over potential takeover offer
FILE PHOTO: The Delivery Hero headquarters is pictured in Berlin, Germany, June 2, 2017. REUTERS/Fabrizio Bensch/File Photo
July 14 : Delivery Hero said on Tuesday it was in advanced negotiations with Uber Technologies regarding a potential takeover offer, confirming earlier media reports that the U.S. ride-hailing and food-delivery company is pursuing the German group.
The statement followed a Bloomberg News report that Uber was in advanced talks to acquire Delivery Hero and could reach an agreement as soon as this week.
The report said a deal would likely value Delivery Hero at well above its recent trading price of around 36 euros per share. The Berlin-based company has gained about 62 per cent this year, giving it a market value of roughly 11.2 billion euros ($12.8 billion).
Delivery Hero declined to comment on speculation about the offer price, but said any potential bid would be made to all shareholders. Uber declined to comment.
Shares of Uber were down nearly 2 per cent, while Delivery Hero closed 5.76 per cent higher at 39.10 euros.
The talks follow months of speculation over Delivery Hero's future, with Uber having approached the company in May with a 38 euros per share offer that investors viewed as too low, according to media reports.
Acquiring Delivery Hero would widen the Uber Eats food-delivery network in Europe, the Middle East, Asia and Latin America, but would also attract attention from antitrust regulators given the overlap in the companies' footprint.
Slowing growth and intense competition have spurred consolidation in the industry as companies seek better margins. Uber has also been moving beyond ride-hailing, strengthening its food delivery business and expanding into grocery, travel and local commerce, including a recent move into hotel bookings.
Earlier this year, Uber unveiled a food-delivery expansion into seven new European markets, including Austria, Denmark and Norway, expecting to generate an additional $1 billion in gross bookings over the next three years.
Reuters had reported in late May that Uber had raised its stake in Delivery Hero to nearly 37 per cent from 25 per cent by acquiring shares from fellow shareholder Aspex Management.
($1 = 0.8731 euros)
