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Deliveroo Shares Surge Following DoorDash Acquisition Proposal

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Shares of Deliveroo experienced a significant increase in London trading on Monday. This surge came after the British food delivery company announced it received an “indicative proposal” from DoorDash for an acquisition priced at 180 pence ($2.40) per share, translating to approximately 2.72 billion pounds ($3.63 billion).

The stock of Deliveroo jumped 17% in London, reaching 171.9 pence, following the news. In contrast, shares of DoorDash showed little movement in premarket trading. The U.S. company has until 5 p.m. London time on May 23 to formally announce its intention to proceed with an offer.

The proposal was received by Deliveroo on April 5, and the company stated that its board conveyed to DoorDash that a firm offer under these terms would likely be recommended to Deliveroo shareholders.

Citi analysts released a statement affirming their “buy” rating on DoorDash stock in light of the proposed acquisition. They noted that Deliveroo aligns with several of DoorDash’s merger and acquisition criteria, particularly in expanding its geographic presence and enhancing total addressable market. The analysts cautioned, however, that DoorDash would require significant time for organic expansion while also seeking to improve long-term free cash flow.

Founded in 2013 and based in London, Deliveroo operates in nine markets, including notable regions like France, Ireland, and Singapore.

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