(Reuters) -British meal delivery company Deliveroo suspended its 100 million pound ($133.13 million) share buyback program on Monday, days after it said it had received a $3.6 billion buyout proposal from U.S. peer DoorDash.
On Friday, Deliveroo said it had received a takeover proposal from DoorDash on April 5 and would likely recommend the 180 pence-per-share offer to shareholders, subject to agreement on other terms.
Early on Monday, Deliveroo shares shot up more than 16% to 170.5 pence.
The per share offer price is at a 22.8% premium to Deliveroo’s Friday close of 146.6 pence.
Deliveroo’s shares have weakened nearly 50% since their 2021 debut as demand for online food delivery stagnated after the pandemic and investors shifted toward more profitable companies.
The deal is expected to face no regulatory hurdles, as it provides DoorDash access to 10 new markets where it currently has no presence, creating a highly complementary footprint – other competitors might encounter more antitrust issues, a source told Reuters on Friday.
Last year, Reuters reported DoorDash had shown interest in a takeover of Deliveroo, but a source said talks ended after disagreements on valuation.
On Monday, Deliveroo said its buyback was suspended with immediate effect and any recommencement of the programme will be announced to the market, and did not provide any other detail.
($1 = 0.7511 pounds)
(Reporting by Chandini Monnappa in Bengaluru; Editing by Rashmi Aich and Louise Heavens)
