Deliveroo shares soar as German rival Delivery Hero gobbles up stake

Delivery Hero, which is based in Berlin and was founded in 2011, has splashed out almost £250m to acquire a 5.1% stake in the business.

Delivery Hero has not had a UK business since it sold Hungryhouse to Just Eat in 2018, but operates in more than 50 countries across Europe, Central and South America, the Middle East and Asia.

It holds a minority stake in Just Eat, as well as Spanish operator Glovo and Rappi, based in Latin America.

Deliveroo’s share price hit highs of 360p yesterday – the highest since its IPO in March. The share price opened at 349p this morning, having closed last week at 326p.

Delivery Hero said it was “always looking for new investment opportunities” and added: “We strongly believe in the future potential of the delivery industry as a whole and therefore decided to purchase shares in one of the companies that is at its forefront.”

Chief executive Niklas Östberg wrote on Twitter that he had known Deliveroo co-founder Will Shu for “many years”, and said: “I’m holding a huge respect for what he and his team have built.”

Östberg insisted Deliveroo was “being oversold at IPO”, leaving the stock “undervalued”. Deliveroo’s shares tumbled more than a quarter on its disastrous stock market debut.

Östberg said: “We considered all possible scenarios back in April when we started acquiring our stake. In no scenario would this be a bad investment long term.”

Shares in Delivery Hero fell 1.3% on the DAX index in Germany after it revealed details of its stake in Deliveroo.