Deliveroo share prices closed Monday’s trading session up by 16.71% in reaction to news of a $3.6 billion takeover bid by US company, DoorDash. The stock highs of 172p, its peak performance since January 2022. It continued with that trajectory on Tuesday, trading at +0.3% on the daily chart in the opening hour.
The takeover is largely expected to proceed smoothly, with regulators unlikely to place restrictions, tanks to DoorDash’s absense in Deliveroo’s 10 markets. It is a continuation of a trend of US giants guiding away some of the UK’s largest companies from the London Stock Exchange, where there is perceived undervaluation.
About 45 London-listed companies were subject of mergers and acquisition bids in 2024, with the average value of bids rising to £1.01 billion, nearly three-fold from the 2023 figure of £390 million.
Deliveroo’s exit from the LSE is a blow to the attractiveness of the exchange for tech companies, coming barely six months after cybersecurity company, Darktrace was delisted after a $5.3 billion buyout by Thoma Bravo. Deliveroo (LSE: ROO) tends to pay out 180p to its shareholders should the DoorDash bid go through by May 23 deadline. The amount is equivalent to a 23% premium on the company’s last closing share price prior to the takeover announcement.
The news is certainly good for Deliveroo share price in the leadup to the takeover deadline. However, the payout still pales to the company’s IPO price of 390p, which infamously attracted the moniker “floparoo” after a dismal performance due to perceived overvaluation amid the Covid 19 pandemic in 2021.
Deliveroo Share Price Prediction
Deliveroo share price pivots at GBX 170 and the momentum calls for an extended upside. The upward motion will likely meet initial resistance at GBX 173. A stronger momentum will breach that barrier and could go on to test the second resistance at GBX 175 .
Conversely, going below GBX 170 will invite bearish control. In that case, ROO price is likely to find the first support at GBX 167. Breaking below that level will invalidate the upside narrative. Also, a strong hold by the sellers could extend losses and test the second support at GBX 165.
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