What happens to the Deliveroo IPO?
Deliveroo will price the London IPO at the bottom of the range. Facts, numbers, comments and analysis
Deliveroo cuts the IPO target range after investor backlash.
The food delivery company set the IPO price at 3.9 pounds per share, at the lower end of the 3.9-4.1 pence price range indicated by the group.
This would indicate an overall valuation of £ 7.6 billion, lower than initially expected of £ 8.8 billion.
The offer is covered multiple times, the bookrunners said, with the deal expected to close at 12 noon London time. “Given the volatile global market conditions for IPOs, Deliveroo is choosing to price responsibly and at an entry point that maximizes long-term value for our new institutional and retail investors,” a Deliveroo spokesperson said.
However, the decision comes after a week in which major fund managers said they would avoid Deliveroo's offer amid concerns about workers' rights.
The food delivery platform, created in London in 2013, works with 115,000 restaurants and is present in around 800 cities around the world and has around 100,000 delivery drivers. The latter are protesting for reduced wages and planning strikes.
All the details.
THE COMPANY'S EXPLANATION
“Deliveroo has received very strong demand from institutions around the world,” explained a spokesperson for the company. But “given the unstable market conditions, Deliveroo has chosen to be responsible in choosing the price”.
Therefore the company insisted that the reduction in the share price has nothing to do with the backlash from investors and industrial action.
LONDON'S BIGGEST IPO IN A DECADE
The listing is set to be Glencore's largest London IPO in May 2011. It will also be the largest technology IPO on the London Stock Exchange, surpassing last year's Hut Group and Worldpay Group's 2015 listing.
THE DOUBTS OF INVESTMENT FUNDS
Although the stock is still expected to be London's largest free float, investors have expressed doubts.
As the Guardian recounts, the UK's largest fund manager, Legal and General Investment Management, which manages over £ 1.3 trillion in assets, said it likely won't be involved, citing concerns about the gig economy it operates in. Deliveroo and the shareholding structure of the company.
Following regulatory concerns highlighted by L&G and others, including Aviva, sustainable investment manager EdenTree indicated Monday that it will avoid IPO, saying the Deliveroo model is "best characterized as a race to the bottom with employees treated primarily as disposable resources, the very antithesis of a sustainable business model ”.
SHAREHOLDERS
Based on what is indicated in the prospectus of the public offering, Amazon, owner of class A shares, will reduce its stake from 15.8 to 11.5%, with voting rights to 5.2%, while the founder Will Shu will rise from 6.1 to 6.3%.
Although Shu will own 6.3% of the company after listing, the stake will carry 57.5% of Deliveroo's voting rights because he will be the sole owner of the Class B shares, which carry 20 votes each, against one vote. each for Class A shares.
DOUBTS ABOUT THE STRUCTURE OF THE CAPITAL OF DELIVEROO
Some investors have raised concerns about the company's dual-class share structure.
This will give CEO Will Shu outsize voting rights for three years by giving him a majority position in shareholder votes.
On the third anniversary of the IPO, Class B shares will automatically convert to Class A.
Hence the corporate governance problems according to investors.
MULTIPLE TYPES OF SHARES HEREBY EXCLUDED ON THE LONDON MARKET
As Bloomberg points out , such dual-class structures, which are common in the United States and allow founders to remain in control even after an IPO, are currently the subject of debate in London.
Until now, the London stock market had excluded companies with multiple types of shares from listing on the FTSE100.
THE RIDERS IN STRIKE
As Deliveroo prepares to go public, its messengers protest and accuse the company of paying them much less than it claims.
On the barricades the messengers of London, where Deliveroo is based, who have announced a strike for next Sunday. Other unions have called a rider strike on April 7, the day scheduled for the listing of the food delivery giant.
NOT ONLY IN LONDON
But the riders are also in turmoil in France, which launch a mobilization for Friday in Bordeaux, Toulouse and Lyon. Same story in Australia, where workers from the global Rights4Riders network (“Rights for delivery boys”) will go on strike the same day demonstrating in Sydney.
Deliveroo has always claimed to pay workers on average more than £ 10 an hour in the UK, but independent analyzes have shown that the real wage is around £ 8.72 an hour, and in some cases it could slip towards two pounds an hour.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/che-cosa-succede-ipo-di-deliveroo/ on Tue, 30 Mar 2021 10:33:28 +0000.