* Targets valuation of up to 7.85 billion pounds
* Order book covered throughout the price range
* Price range narrowed to 3.90-4.10 pounds a share
* Deal set to be London's biggest IPO in a decade
(Adds detail on pricing, context)
By Pamela Barbaglia and Abhinav Ramnarayan
LONDON, March 29 (Reuters) - Deliveroo has attracted bumper
demand from investors for its initial public offering, setting
the stage for London's biggest IPO in a decade, potentially
valuing the online food delivery company at around 8 billion
pounds ($11.03 billion).
The listing is set to be London's biggest IPO since Glencore
in May 2011 and also the biggest tech float on the London Stock
Exchange, dwarfing The Hut Group last year.
Banks working on the deal said on Monday that order books
were covered throughout the price range, showing that investor
demand had exceeded the full deal size.
Deliveroo, due to make its debut on March 31, narrowed its
price range on Monday to between 3.90 and 4.10 pounds per share,
indicating a valuation of between 7.6 billion pounds and 7.85
billion pounds ($10.48 billion - $10.82 billion), excluding
shares offered as part of an over-allotment issue.
The company, founded by boss William Shu in 2013, opted
against pricing the deal at the top of the original price range
of between 3.90 and 4.60 pounds - which would have given it a
market value of up to 8.8 billion pounds - citing market
volatility.
"Deliveroo has received very significant demand from
institutions across the globe. The deal is covered multiple
times throughout the range, led by three highly respected anchor
investors," a company spokesperson said.
"Given volatile global market conditions for IPOs, Deliveroo
is choosing to price responsibly within the initial range and at
an entry point that maximises long-term value for our new
institutional and retail investors."
A source familiar with the listing said the company had
taken a "responsible" approach given the performance of some
recent IPO deals, such as U.S. cloud computing firm DigitalOcean
and British online reviews platform Trustpilot
, which were both trading below their IPO price.
LOCKDOWN DEMAND
Deliveroo has benefited from lockdown demand for takeaway
food during the COVID-19 crisis when restaurants across Europe
were forced to shut down.
Its revenues have soared and its so-called gross transaction
value - a measure of the total value of orders received - jumped
64.3% in 2020 to 4.1 billion pounds.
Yet, despite bumper investor demand some British
institutional investors are not comfortable with the company's
decision not to pursue a premium listing. This allows its CEO
Shu to retain enhanced shareholder rights but means the company
will not join the FTSE indices.
UK fund manager Legal & General Investment Management said
last week it was unlikely to participate in the IPO.
"It is important to protect minority and end-investors
against potential poor management behaviour, that could lead to
value destruction and avoidable investor loss," LGIM said.
Deliveroo's order book has so far attracted strong interest
from U.S. investors, the source familiar with the IPO said,
which have more experience with the dual-class share structures
and the dynamics of tech listings.
JPMorgan and Goldman Sachs are acting as
joint global coordinators on the deal while Bank of America
, Citigroup, Jefferies and Numis
are the joint bookrunners.
($1 = 0.7270 pounds)
($1 = 0.7254 pounds)
(Reporting By Pamela Barbaglia; Editing by Alex Richardson,
Edmund Blair and Jane Merriman)
