Amazon.com Inc. will see its stake in Deliveroo fall to 11.5 per cent when the British food delivery company goes public via an initial public offering, the IPO prospectus showed.
Deliveroo, in which Amazon currently has a 15.8-per-cent stake, began roadshows this week for its London IPO. It set a price range of between £3.90 and £4.60 a share, giving it a market value of between £7.6-billion and £8.8-billion (US$10.46-billion to US$12.11-billion).
This includes the sale of new shares to raise £1-billion and about 128.2 million shares from existing shareholders at the final price.
The prospectus said Amazon is set to shed around 23.3 million shares as part of this, allowing the tech group to raise between £90.87-million and £107.18-million from the deal.
This, along with the dilution from the issue of new shares, will see its stake fall to 11.5 per cent.
“We congratulate Deliveroo on their IPO and can confirm that on completion of the IPO, Amazon will still own a large proportion of our pre-IPO minority stake,” a spokesperson for Amazon said.
Amazon raised its stake in Deliveroo to 16 per cent last year in a transaction that had to be cleared by Britain’s competition watchdog.
The U.S. company also participated in a US$180-million private funding round in January that valued Deliveroo at more than US$7-billion.
Other selling shareholders in the IPO include Index, DST, Greenoaks, Bridgepoint and Accel.
Deliveroo founder Will Shu is retaining his 6.3-per-cent stake, but will have 57.5 per cent of the voting rights of the company because of a dual-class share structure.
The structure, which is relatively new to London, has meant that Deliveroo is aiming for a standard London Stock Exchange listing as opposed to a “premium” listing that gives companies access to the FTSE indexes.
If recommendations of a review by former European commissioner Jonathan Hill are implemented later this year, companies with a dual-class structure will be able to obtain a premium listing.
Deliveroo customers are allowed to participate in the IPO through a £50-million “community offer,” a first for the London Stock Exchange.
Shares in the community offer will start trading a week after the stock market debut, when “unconditional” trading begins on April 7, while institutional investors can begin trading the shares on March 31, the prospectus stated.
Deliveroo said in the prospectus that it is involved in legal proceedings in a number of countries, as it faces challenges around the status of its drivers as independent contractors.
“The independent contractor status of riders, which applies in most of the jurisdictions in which we operate, has been and continues to be the subject of challenge in certain markets, including in our key markets,” Deliveroo said.
The company is engaged in such proceedings in a number of the countries in which it operates including Britain, France, Spain, the Netherlands and Italy, it said.
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