According to the initial public offering (IPO) prospectus of the British food delivery firm Deliveroo, one of its biggest investors – Amazon.com, will reduce its stake in the company from 15.6 per cent to 11.5 per cent when the firm gets itself listed through an IPO.
While beginning roadshows for its London IPO this week, Deliveroo set a price range of between 3.90 and 4.60 pounds per share which gave it a market valuation of between 7.6 billion pounds and 8.8 billion pounds ($10.46 billion-$12.11 billion).
This includes the sale of new shares to raise 1 billion pounds and about 128.2 million shares from existing shareholders at the final price.
As a part of that sell off, around 23.3 million of its shares in Deliveroo will be sold off by Amazon, the prospectus said, which will tentatively generate between 90.87 million and 107.18 million pounds from the deal for the United States based tech giant.
Last year, its stake in the British firm was raised by Amazon to 16 per cent in a deal which had to be cleared by the competition regulator of the UK.
In a $180 million private funding round in January, in which the US e-commerce company had also participated, had valued the British company at more than $7 billion.
DST, Greenoaks, Bridgepoint and Accel are among the other stakeholders in Deliveroo who would be shedding their stocks too.
Will Shu, founder of Deliveroo, will have a 57.5 per cent of the voting rights of the company because of a dual-class share structure even though he would be retaining his stake of 6.3 per cent.
Such a dual structure is relatively new for the London Stock Exchange which meant that the aim of Deliveroo is to go for a standard London Stock Exchange listing instead of a “premium” listing which would have given the company the opportunity to be a part of the FTSE indices.
Those companies in London with a dual-class structure will also be able to access a premium listing at the exchange if the recommendations of a review by former European Commissioner Jonathan Hill are implemented later this year.
Customers of Deliveroo would also be able to participate in the IPO through a 50 million pound “community offer” which will also be the first time that will happen at the London Stock Exchange.
According to the Deliveroo IPO prospectus, trading in the shares in the community offer will begin only after a week of the stock market debut of the company with the start of “unconditional” trading on April 7. On the other hand, institutional investors will be allowed to trade on the stocks on March 31.
The company however declared in its prospectus about it being engaged in legal proceedings in a number of countries as the company faces the challenge of its classification of its delivery staff as being contractors and not employees.
“The independent contractor status of riders, which applies in most of the jurisdictions in which we operate, has been and continues to be the subject of challenge in certain markets, including in our key markets,” Deliveroo said.
(Adapted from Nasdaq.com)