Uber Raises Delivery Hero Stake To 36.83% Amid Takeover Talks

This article first appeared on GuruFocus.

Uber Technologies (NYSE:UBER) has moved deeper into Delivery Hero (DELHY) at a pivotal moment, buying out Aspex Management’s shares and raising its total stake to 36.83% while it negotiates a possible acquisition of the German food-delivery platform. The move puts Uber in a stronger position around Delivery Hero, but still keeps its voting rights attached to shares at 24.99%, with the rest of the stake held through instruments, leaving it below a level that could trigger a mandatory offer.

People familiar with the matter said Uber paid just below 40 per share for the Aspex position, even though Delivery Hero said it received a 33-per-share takeover offer from Uber on Saturday. That bid valued the Berlin-based company at about 10 billion, or $11.6 billion, and carried no premium to Delivery Hero’s most recent share price. Before this latest move, Uber was already Delivery Hero’s largest shareholder after disclosing a nearly 20% stake earlier this month, along with options for another 5.6%.

The deal also removes a vocal activist investor from the shareholder base. Aspex had pushed Delivery Hero to sell assets and successfully pressured the company to oust co-founder and CEO Niklas Ostberg, arguing that the company was valued below peers because it operated across too many markets with different competitive, legal, and regulatory conditions. Prosus still owns another 17% of Delivery Hero, but the EU has required it to sell down most of that position by August as part of its approval for Prosus’s acquisition of Just Eat Takeaway.com, and Prosus has asked the EU to drop that demand while negotiations continue.