Deliveroo lowers valuation after investors shun IPO
Will Shu: bringing firm to market this week
Food delivery company Deliveroo has lowered the price range of its forthcoming IPO after some major institutions said they will not take part.
It will price its shares between £3.90-£4.10, down from the range of £3.90-£4.60 announced last week, which sees its top end valuation fall by around £1 billion to £7.85bn, from £8.8bn.
The price shift comes in spite of earlier saying it has seen investor demand for its initial public offering exceed the full deal size.
James Anderson, manager of Scottish Mortgage Investment Trust, is the latest to shun the listing.
Mr Anderson, who earlier this month announced his retirement from Baillie Gifford, said he will not participate in the Deliveroo flotation because its model is heavily reliant on London.
Legal & General, M&G, Aberdeen Standard Investments and Aviva Investors are among those boycotting the issue. Some supporters of Deliveroo say these institutions do not normally invest in this type of stock.
Deliveroo, founded by former City banker Will Shu, is due to make its stock market debut on 31 March in what could be London’s biggest listing in a decade.
The company opted against a premium listing, ruling it out of inclusion in the FTSE indexes.
A trade union has called for Deliveroo’s UK riders to strike, saying the action would highlight dissatisfaction with the company’s business model and approach to workers’ rights.
“Investing in Deliveroo means associating yourself with the exploitative and unstable business model,” IWGB President Alex Marshall said in a statement, adding the strike was planned for 7 April.