Deliveroo Holdings plc priced its initial public offering at 390 pence per Class A share on 31 March 2021, the bottom of the range set out in its prospectus, and conditional dealings in the shares began on the London Stock Exchange the same day under the ticker ROO. Contemporary reports said the shares fell by as much as 30% after trading opened and closed about 26% below the offer price. Formal admission of the shares followed on 7 April 2021.
The fall drew wide attention because the offer, at about £1.5 billion, was a large one for London. The Guardian, reporting on the day of the debut, cited the data provider Dealogic as saying it was the worst first-day performance for a London IPO worth more than £1 billion. That ranking was limited to offers above a size threshold and to a single day’s trading, and this review did not check it against Dealogic’s own data.
Background to the offer
Deliveroo published its prospectus on 22 March 2021. It offered up to 384,615,384 Class A shares at an indicative price of 390 to 460 pence per share and sought admission to the standard listing segment of the Financial Conduct Authority’s Official List, with trading on the London Stock Exchange’s main market.
The company was to have two classes of shares. Class A shares carried one vote each. Class B shares were not to be listed; all of them were to be held by the founder and chief executive, Will Shu, and they carried twenty votes each while he or a permitted transferee held them. The prospectus estimated that this would give him about 57% of the voting rights at admission, on the assumption of an offer price at the mid-point of the range and no exercise of the over-allotment option.
Before the offer was priced, several fund managers said publicly that they would not take part. The National reported that Aviva Investors declined because Deliveroo’s UK riders did not receive the minimum wage, sick leave or holiday pay, and named Legal & General, Aberdeen Standard and BMO Global among other investors that stayed out. The same report said some investors had raised concerns about the dual-class structure. Deliveroo itself, according to both newspapers, attributed the decision to price at the bottom of the range to “volatile” market conditions.
Key facts and timeline
| Date | Event | Source |
|---|---|---|
| 22 March 2021 | Prospectus published; indicative price range of 390–460p; up to 384,615,384 Class A shares offered | Deliveroo prospectus; offer price announcement |
| 31 March 2021 | Offer priced at 390p (£3.90) per share; market capitalisation of about £7.59bn at that price, excluding over-allotment shares | Deliveroo offer price announcement (RNS) |
| 31 March 2021 | Offer of about £1.50bn: 256,410,256 new shares raising about £1bn gross for the company, and 128,205,128 existing shares raising about £500m for selling shareholders; a further 38,461,538 shares available under an over-allotment option | Deliveroo offer price announcement (RNS) |
| 31 March 2021 (scheduled for 8 a.m. London time) | Conditional dealings began under the ticker ROO; only investors allocated shares in the institutional offer could deal on a conditional basis | Offer price announcement; Deliveroo 2021 annual report |
| 31 March 2021, close | Shares ended the day at about 287p (£2.87), roughly 26% below the offer price, after falling by as much as 30% earlier in the session | The Guardian; The National |
| 7 April 2021 | All 1,714,330,179 issued shares admitted to the standard listing segment and to trading on the main market, the point at which dealings became unconditional under the offer timetable; the company announced its intention to change its name to Deliveroo plc | Deliveroo admission announcement (RNS); 2021 annual report |
Several of these figures are easy to conflate. The £7.59 billion figure was a market capitalisation at the offer price, not money raised. Of the roughly £1.5 billion offer, about £1 billion in gross proceeds went to the company from new shares; the rest went to existing shareholders who sold. Some reports at the time described the listing as raising £1.5 billion without making that split.
The first-day fall also took place before formal admission. Under the prospectus, conditional dealings would be of no effect if admission did not take place, and they were at the sole risk of the parties involved. Admission went ahead on 7 April 2021, a week after the first day of trading.
What remains uncertain
- The exact closing price and percentage fall. The newspaper reports reviewed gave rounded figures of 287p and 26%. This review did not obtain an exchange record of the official closing price, so it does not state a more precise number.
- The first-day closing valuation. The National put Deliveroo’s value at the close at £5.23 billion. Other reports from the time gave different figures, and none of the sources reviewed stated which share count each figure used, so no single closing valuation is given here.
- The “worst” ranking. The Dealogic comparison reported by The Guardian applied to London IPOs worth more than £1 billion and to first-day performance only. It was not checked against the underlying dataset, and it does not support a wider claim about London’s or any market’s IPO history.
- Why the shares fell. Investor objections over riders’ working conditions, concerns about the dual-class structure, and the market conditions the company cited were all reported at the time. The sources reviewed do not establish how much each contributed to the first-day price.
- The over-allotment option and final voting control. The sources reviewed do not confirm whether the over-allotment option was exercised, or the founder’s exact share of voting rights at the final offer price rather than at the mid-point assumed in the prospectus.
About this review
This is a newly written historical review based on the sources listed on this page: Deliveroo’s prospectus, its regulatory announcements of 31 March and 7 April 2021, its 2021 annual report, and contemporary newspaper reports. It is not the original article that was once published at this address. The original author and original publication date could not be confirmed, and no archived copy of the earlier page could be retrieved when this review was prepared. The address has been kept so that existing links continue to work; its wording (“worst IPO in history”) comes from the earlier page and is not a finding of this review.
The review describes events up to 7 April 2021 and does not cover Deliveroo’s later share price or business. It is a historical account, not investment advice. Other reviews of past events are listed in the Historical Archive.
