A biker wearing a Deliveroo backpack drives in the central Barcelona, Spain, July 23, 2019. REUTERS/Albert Gea
LONDON, Aug 9 (Reuters Breakingviews) - Delivery Hero (DHER.DE) has a strange appetite for holding shares in its competitors. The 33 billion euro German food delivery company has built up a 5% stake in Deliveroo (ROO.L), worth nearly 300 million pounds using Friday’s share price, according to a Monday filing from the newly listed UK group. Deliveroo shares promptly rose more than 9%.
Delivery Hero already owns 7.4% of Just Eat Takeway.com (TKWY.AS) and has invested in startups Glovo and Rappi. It may also have spotted a bargain: Deliveroo trades at more than 2 times expected 2022 sales, using Refinitiv estimates, while Delivery Hero and Just Eat Takeaway are valued at an average of 3.5 times.
Nevertheless, the logic is hard to divine. Deliveroo boss Will Shu has over 50% of the voting rights, meaning any takeover would have to be friendly. The German group also lost 1.4 billion euros after tax on 2.5 billion euros of sales in the year to December. Building passive stakes in rivals seems an odd use of scarce cash. (By Karen Kwok)
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