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Reuters
28-04-2025
- Business
- Reuters
DoorDash's Deliveroo swoop is pricey but timely
LONDON, April 28 (Reuters Breakingviews) - Tony Xu has picked a good time to chow down on a rival. The DoorDash (DASH.O), opens new tab chief executive has offered, opens new tab to gobble up Deliveroo (ROO.L), opens new tab, valuing his British peer at $3 billion after deducting net cash. While the $79 billion U.S. food delivery group's all-cash deal requires more than a morsel of optimism, there's logic in taking the plunge now. After a pandemic boom followed by a relative bust as incumbents battled with investors' new preference for food delivery groups that break even, the European sector is consolidating. In February Prosus ( opens new tab made a 4.1 billion euro move on Just Eat ( opens new tab, three months after its target offloaded Grubhub. Given that Prosus intends to soup its new acquisition up with investments to drive growth, the risk is Just Eat's 21% UK market share - as calculated by Bernstein analysts – waxes and Deliveroo's 38% wanes. DoorDash, which has over 60% of the U.S. market but no UK presence, also has a timing advantage. Prosus has a big war chest but is preoccupied with Just Eat, and its other investment Delivery Hero ( opens new tab is hampered by a high debt load. Xu's group faces less regulatory scrutiny than (AMZN.O), opens new tab, which holds a 14% stake in Deliveroo, or other players with a meaningful domestic presence like Uber Technologies (UBER.N), opens new tab. All this explains why Xu might be able to get away with offering a premium that's only 23% above Deliveroo's closing price on Friday. On the face of it, this constitutes a good deal. It values Deliveroo at 13 times 2025 EBITDA, similar to the multiple Prosus offered for Just Eat. That's way below the 27 times DoorDash trades on, which reflects its superior growth. At 180 pence a share, it's also miles below Deliveroo's 390 pence initial public offering price back in 2021. Still, it doesn't mean Xu is guaranteed a chunky return. Assume he can cut 10% of fixed costs, amounting to $60 million on Bernstein estimates. Also assume a 25% tax rate, and $313 million in operating profit by 2028 as per Visible Alpha estimates. DoorDash's return on invested capital would be around 9%, still below Deliveroo's 10% cost of capital, per Morningstar estimates. That operating profit is also three years away and over triple Deliveroo's estimated 2025 figure. Xu does boast a track record in scaling up European targets. Analysts expect Wolt, acquired by DoorDash in 2022, to increase at a compound annual growth rate of 16% up until 2029. And Deliveroo comes with nine markets including the Middle East as well as the UK and Europe. Yet given a bidding war would make the deal maths more tenuous, Xu is right to choose a time that minimises the risks of there being one. Follow @karenkkwok, opens new tab on X CONTEXT NEWS British meal delivery company Deliveroo said on April 25 it received a cash proposal from U.S. peer DoorDash on April 5 to buy all of its shares for 2.7 billion pounds ($3.6 billion). Deliveroo announced that its board has reviewed DoorDash's proposal of 180 pence per share and 'would be minded to recommend' it to shareholders, contingent upon agreeing on the other terms of the offer. DoorDash will need to make a firm offer by May 23. Deliveroo shares rose 16% to 170 pence as of 0810 GMT on April 28. For more insights like these, click here, opens new tab to try Breakingviews for free. Editing by George Hay, Oliver Taslic and Streisand Neto Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.
Reuters
18-04-2025
- Business
- Reuters
Independent directors exit India's Gensol after co-founders probed
April 18 (Reuters) - Two independent directors at embattled Gensol Engineering ( opens new tab resigned, the company said on Thursday, marking the third exit this week after regulators accused its co-founders of misusing funds, including using money meant for an EV affiliate to buy a luxury apartment. The Securities and Exchange Board of India (SEBI) this week barred Anmol Jaggi and his brother Puneet from the stock market and ordered a forensic audit of solar firm Gensol, which procured electric vehicles for BluSmart. The popular ride-hailing service, seen as a rival to Uber (UBER.N), opens new tab, was co-founded by Anmol, who also serves as Gensol's managing director. Gensol on Thursday said, opens new tab in that Harsh Singh and Kuljit Singh Popli have resigned as independent directors with immediate effect. This follows the resignation, opens new tab of Arun Menon, another independent director at Gensol. Popli in his resignation letter said, "... the way things have unfolded and come to light, I am not in a position to continue as (an) Independent Director." "I was hopeful that the company that has grown so fast and had been enjoying good reputation and good will, will continue to grow... and governance issues as brought out will be addressed. However that has not happened," Popli added. BluSmart also said on Thursday it has suspended its operations with a decision to "temporarily close bookings" on its app. Gensol, Anmol Singh Jaggi and Puneet Singh Jaggi did not immediately respond to Reuters' requests for comment on SEBI's accusations.
Reuters
16-04-2025
- Automotive
- Reuters
Lyft investor Engine Capital to name board nominees in start to proxy battle
April 16 (Reuters) - Activist investor Engine Capital is gearing up for a proxy battle at Lyft (LYFT.O), opens new tab, as it prepares to nominate two directors to the board of the ride-hailing company. The hedge fund, which owns about 1% of Lyft, said on Wednesday it is set to nominate Alan Bazaar and Daniel Silvers for election to the board of the company, which has underperformed rival Uber Technologies (UBER.N), opens new tab and the broader market. "There is an urgent need for shareholder-driven change in Lyft's boardroom, which is unfortunately dominated by misaligned founders and independent directors with insufficient public market experience," said Arnaud Ajdler, Engine Capital's founder and portfolio manager. Lyft's shares rose about 2% before the bell on Wednesday, after it announced its entry into European markets by acquiring Germany's FreeNow mobility platform for nearly $200 million. Last month, Reuters first reported about Engine Capital nominating directors at Lyft. The ride-hailing company did not immediately respond to a request for comment on the nomination. Engine Capital criticized Lyft's dual-class share structure, which gives founders, who collectively own less than 2.5% of the company, about 30% of voting power. The activist also highlighted negative shareholder returns in the past five years. Lyft has a market value of about $4.6 billion, compared to larger rival Uber's $155 billion. While Uber expanded internationally and diversified into food delivery and other services, Lyft has maintained its focus on the North American ride-hailing market. Engine Capital said it had attempted to engage privately with Lyft's leadership in recent months, offering "value-enhancing ideas" and suggesting director candidates with public market experience, but was rebuffed. According to the activist, Lyft's nominating and corporate governance committee did not offer to interview its nominees. Lyft currently has a 10-member board, with four directors standing for election at this year's annual meeting. The company requires shareholders to own at least a 1% stake to nominate directors, according to a regulatory filing last year.
Reuters
16-04-2025
- Automotive
- Reuters
Lyft to enter European market with $200 million FreeNow acquisition
April 16 (Reuters) - Lyft (LYFT.O), opens new tab is buying mobility platform FreeNow from German automotive giants BMW ( opens new tab and Mercedes-Benz ( opens new tab for 175 million euros ($198.40 million) to expand into the European ride-hailing market, the U.S. company said on Wednesday. Under pressure from dominant ride-hailing rival Uber Technologies (UBER.N), opens new tab in its home North American market, Lyft has been seeking new avenues to grow its business. The acquisition of FreeNow will nearly double its potential market and open doors to major European cities such as London, Frankfurt, Paris and Milan, where the German firm offers services ranging from traditional taxi to e-scooter rentals and car-sharing options. Lyft would be entering the European market at "a good price and more importantly, a great time," Lyft CEO David Risher told Reuters, adding the company was in a financially strong position to expand. FreeNow operates in more than 150 cities across nine European countries. The company said in September it had achieved break-even status, on the back of a 13% year-on-year increase in 2024 revenue and its focus on taxi operations. Lyft said the acquisition will almost double its addressable market to more than 300 billion personal vehicle trips per year from about 161 billion. "Almost half of the taxi industry in Europe is still offline. So it's also where a lot of growth potential comes from," FreeNow CEO Thomas Zimmermann said in an interview. But its efforts to grow in Europe by capturing more of the offline market will face competition from Uber as well as Estonia's Bolt Technology, as both companies have a strong hold over the European market. European regulations are also pushing ride-hailing firms to enhance driver benefits, such as minimum wage guarantees and holiday pay, while also increasing pressure on pricing structures to ensure fair compensation. Bolt recently introduced benefits such as holiday pay and minimum wage guarantees for UK drivers in response to regulatory pressures. ($1 = 0.8821 euros)
USA Today
22-02-2025
- Automotive
- USA Today
Uber CEO Khosrowshahi supports Trump's push to eliminate taxes on tips
Rishi Kant Reuters Uber's UBER.N CEO Dara Khosrowshahi said on Friday that both he and the ride-hailing firm are supportive of U.S. President Donald Trump's initiative to eliminate taxes on tips received by its drivers. "I think the President has said he believes in no taxes on tips generally. We think it's a terrific idea and we will be very, very supportive of that initiative," Khosrowshahi said at a conference hosted by Saudi Arabia's sovereign wealth fund in Miami. President Trump made a campaign promise in Las Vegas to cut taxes on tips. He first made the proposal in June last year, as he courted service workers in the presidential swing state of Nevada. The tip-heavy hospitality industry comprises more than a fifth of all jobs in the state. Tax season:Will IRS layoffs affect your 2025 tax refund? How to check refund status, schedule Trump said on Wednesday he is going to work with Republicans in Congress to significantly reduce taxes for individuals and companies. Need a break? Play the USA TODAY Daily Crossword Puzzle. "We're going to dramatically cut taxes for families and for workers and for companies, including no tax on tips and hopefully no tax on Social Security and no tax on overtime," Trump said at the conference in Miami. Recent research from the Budget Lab at Yale, a non-partisan policy research center, estimated that as few as 3% of taxpayers nationally would benefit from a tipped-earnings exemption, with many others who collect tips making too little to owe any federal taxes. Reporting by Rishi Kant in Bengaluru; Editing by Alan Barona
