MARKET REPORT: Deliveroo soars as speak of US takeover heats up

Deliveroo shares were in demand yesterday as the takeover of arch-rival Just Eat Takeaway sparked speculation about more deals in the sector.

The FTSE 250 business’s stock jumped 4.7 per cent, or 6.3p, to 141.8p as investors bet it could be the next food delivery group to be targeted by predators.

US group DoorDash was reported to have made an approach for Deliveroo last year and it would not be a surprise to see it return with a fresh bid.

Analysts at French investment bank Bryan, Garnier & Co said they expect DoorDash to table an offer by the end of the year.

Deliveroo is valued at around £2.2billion – well below its peak of £6billion in 2021 and just a fraction of the £66bn market capitalisation of DoorDash.

The rally in Deliveroo shares in London came after Amsterdam-listed Just Eat backed a £3.4billion takeover offer from Dutch investment firm Prosus.

Takeover talk: Deliveroo’s stock jumped 4.7% as investors bet it could be next food delivery group to be targeted by predators

Just Eat shares surged 54.1 per cent in Amsterdam.

Susannah Streeter, head of money and markets at broker Hargreaves Lansdown, said: ‘Deliveroo’s shares have risen sharply on the development even though a bigger group would be a more fearsome rival. 

‘Speculation seems to be mounting that the takeaway platform could become a takeover target.’

National Grid was also in dealmaking mode with the sale of its US onshore renewables business to Brookfield Asset Management for £1.4billion.

National Grid Renewables develops, constructs, owns and runs solar, onshore wind farms and battery storage assets in the US. National Grid shares gained 2 per cent, or 18.8p, to 977p.

With the German election in focus on the Continent, the FTSE 100 inched down 0.01 per cent, or 0.39 points, to 8658.98 in London and the FTSE 250 slipped 0.6 per cent, or 129.5p, to 20484.39.

Defence stocks were on the rise on hopes the new German government will boost military spending. 

Reports of a private equity swoop on Chemring (up 4.3 per cent, or 15.5p, to 373.5p) also lifted the sector with BAE Systems rising 3.9 per cent, or 49.5p, to 1305p and Qinetiq gaining 2.7 per cent, or 10.2p, to 395p. 

GSK rose 1.6 per cent, or 23.5p, to 1452.5p after it announced the start of its £2billion share buyback programme with an initial tranche of stock purchases worth up to £700million.

The drugs giant also completed the £900million-plus takeover of American rare cancer therapies producer IDRx.

Shares in British Gas owner Centrica rose 4.1 per cent, or 5.95p, to 151.05p, taking gains in the three sessions since it published results and announced a share buyback plan to 11 per cent.

Analysts at Jefferies raised their target price on the stock to 180p from 150p and hailed last week’s ‘impressive’ update.

All eyes were on the Burberry catwalk at London Fashion Week last night. 

But excitement around the show did little for its share price, which fell 3.9 per cent, or 41p, to 1022p yesterday before the glitz and glamour got under way.