Uber Considering Increasing Bid for Delivery Hero Acquisition

According to a report by the Financial Times, Uber's board of directors met on Saturday to discuss raising its acquisition offer for German food delivery group Delivery Hero. Uber had previously proposed an offer of 38 euros per share to a major shareholder in Delivery Hero, valuing the company at over 11.5 billion euros, but was rejected.

Several insiders revealed that Uber CEO Dara Khosrowshahi traveled to Oslo last week to meet with Delivery Hero's supervisory board chair Kristin Skogen Lund, during which he proposed an initial offer of 33 euros per share. After the subsequent 38 euros per share offer was also rejected, Uber is currently considering whether to increase the price further.

Delivery Hero issued a statement on Saturday confirming contact with Uber. The statement read:

"Uber Technologies has proposed a indicative offer of 33 euros per share for possibly launching a takeover bid to all shareholders. The company will continue to fully advance the strategic evaluation process and will provide further updates when necessary or appropriate."

Several shareholders have told the Financial Times that they hope the company's sale price can exceed 40 euros per share. At this price, there is a premium of about 19% over Delivery Hero's closing price on Friday, corresponding to a corporate valuation of about 13 billion euros.

Uber is not the only buyer interested in Delivery Hero. Three insiders stated that American delivery giant DoorDash has also been in contact with Delivery Hero shareholders and making inquiries, but has not yet purchased any shares.

The current equity structure further increases the complexity of transactions. Uber has disclosed holding 19.5% of Delivery Hero's shares and an additional 5.6% interest through derivatives. At the same time, Morgan Stanley has disclosed in regulatory filings its holding of about 27% interest in Delivery Hero, mainly through equity swaps. Insiders have stated that Uber is looking into acquiring more derivative instruments to increase its indirect ownership in Delivery Hero to over 30%.

Global Food Delivery Market Consolidation

The potential deal surrounding Delivery Hero takes place against the backdrop of ongoing consolidation in the global food delivery industry. Previously, DoorDash acquired Deliveroo for £2.9 billion, and Prosus also acquired Just Eat Takeaway for €4.1 billion last year. If Uber or DoorDash ultimately completes the acquisition of Delivery Hero, it will be another significant M&A in this wave of consolidation.

Delivery Hero itself is at a critical period of strategic adjustment. Insiders say the company's board of directors is assessing the possibility of an overall sale or divesting Middle Eastern and Korean business through a series of transactions. In addition, company founder and CEO Niklas Östberg revealed to investors last week that he will step down by March 2027. Prior to this, Delivery Hero had faced pressure from shareholders for several consecutive years.