US bank says Delivery Hero shares have further to run as Uber and DoorDash circle the Berlin-based group Jefferies has raised its target price on Delivery Hero (XETRA:DHER, OTCQX:DLVHF) from €29 to €42.50, arguing that the scramble by Uber Technologies Inc (NYSE:UBER,…
TRA:UT8)and DoorDash to acquire the German food delivery group is just the beginning of an endgame that should push the shares higher still. Uber tabled an indicative offer of €33 per share last week, valuing Delivery Hero at around €10 billion, but the approach was swiftly rebuffed
Uber’s board met on 25 May to discuss raising its bid, with the current offer of €38 per share also having been declined by major shareholders. DoorDash Inc (NYSE:DASH) has separately expressed interest in Delivery Hero’s Middle Eastern operations, with some shareholders indicating that the company’s 80% stake in Talabat alone could be worth up to €9 billion. Jefferies analyst Giles Thorne notes the myriad ways the situation could unfold but says the direction of travel for Delivery Hero’s share price is clear: upward.
The broker identifies three forces that will shape the outcome. First, activist investor Aspex Management, now holding around 15% of Delivery Hero, is expected to push for a price significantly above current levels. Aspex acquired a 5% block directly from Prosus for roughly €335 million at a 22% premium to the 30-day volume-weighted average price, signalling conviction in a much higher exit valuation.