The delivery aggregator said in an update to the London Stock Exchange this morning (28 April) that the £100m buyback programme, which it announced last month, has been suspended with immediate effect.
It comes after Deliveroo confirmed on Friday (25 April) that DoorDash, which operates across the US, Canada, Australia and New Zealand, had made an indicative cash offer valuing the company at 180p per share.
The figure is a stark contrast to the 390p per share Deliveroo offered when it floated on the London Stock Exchange in March 2021, which valued the company at approximately £7.6bn.
Deliveroo has indicated to DoorDash it would be minded to recommend such an offer to shareholders, having considered it with its advisers.
Accordingly, the company’s board has engaged in discussions with DoorDash in relation to the possible offer and has provided DoorDash with access to due diligence.
DoorDash now has until 5pm BST on 23 May to either make a firm offer or walk away.
The Guardian reports that shares in Deliveroo surged 17% in reaction to the takeover offer.
Deliveroo shares hit about 171p in early trading on Monday, its highest level since 2022.
A takeover deal could see Will Shu, who founded Deliveroo in 2013, bank about £172m based on his 5.9% stake in the business.
Shu is one of the largest shareholders in Deliveroo, although Amazon is its largest investor, with a stake of 13%.
Other large shareholders include Index Ventures, the London venture capital firm, and Morgan Stanley Investment Management, the asset management arm of the American investment bank.
Deliveroo reported its first full year profit in its financial results last month for the year ended 31 December 2024.
Profit for the period was £3m, compared to a loss of £32m in 2023. Adjusted EBITDA rose 52% to £130m from £85m.