Uber Reportedly Adds To Its Delivery Hero Stake At €12B Valuation

• Uber increased its stake in Delivery Hero to nearly 37% from 25%.
• Acquired Aspex Management’s 14.6% stake in Delivery Hero.
• Uber agreed to pay slightly below €40 per share, valuing Delivery Hero at about €12bn, FT reported.

Uber Technologies Inc. (UBER) share price gained nearly 1% on Wednesday amid media reports the company is considering a higher acquisition offer for German food delivery giant Delivery Hero after a major shareholder rebuffed a recent multibillion-dollar proposal.

The San Francisco-based tech company acquired Aspex Management’s 14.6% stake in Delivery Hero earlier this week through a series of share purchases and derivatives, Financial Times reported citing three people familiar with the matter.

Uber agreed to pay slightly below €40 per share, valuing Berlin’s Delivery Hero at about €12bn, the people added.

The Berlin-based delivery company confirmed that Uber initially submitted an indicative proposal of €33 per share, a bid valuing the entire company at approximately €10 billion ($11.6 billion). Following that opening approach, Uber Chief Executive Dara Khosrowshahi traveled to Oslo to present the parameters of the deal to Kristin Skogen Lund, the chair of Delivery Hero's supervisory board.

However, when Uber later extended a sweeter offer of 38 euros per share directly to one of Delivery Hero's largest investors, the proposal was rejected, the Financial Times reported. In response to the pushback, the Uber board of directors held a weekend meeting to discuss the status of the takeover bid and determine whether to increase the offer price again, according to sources familiar with the matter.

UBER’s Delivery Hero Takeover Ambitions

Uber’s delivery platform rival DoorDash Inc. has also been circling the German firm. DoorDash has held exploratory inquiries with Delivery Hero shareholders, though it has not yet acquired any direct equity, the Financial Times noted. 

Uber is already deeply embedded in Delivery Hero's equity structure. Earlier this month, the ride-hailing and delivery pioneer rapidly expanded its holding to a 19.5% direct stake, supplemented by financial derivatives representing an additional 5.6%. Morgan Stanley is advising Uber on the potential transaction.

UBER Retail View 

Retail sentiment on Stocktwits was “bullish” with “high” message volumes. 

Uber stock dropped 12.7% year-to-date.

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