Deliveroo has halted its £100 million share buyback programme in light of a takeover proposal from its US rival, DoorDash.
The takeaway delivery giant had announced the programme, which would have increased shareholder returns to £550 million since 2023, in its full-year results in March, as reported by .
However, Deliveroo noted that it may resume the programme at a later date.
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On April 25, the company confirmed that it had received a takeover offer from DoorDash earlier in the month, marking the US giant's latest acquisition move since its £5.2 billion purchase of Finnish delivery firm Wolt in 2021.
Deliveroo's share price surged over 15% in early trading on Monday following the late Friday announcement.
This proposal comes as the sector sees increasing consolidation, with global tech firm Prosus acquiring Just Eat Takeaway.com for £3.3 billion in February.
DoorDash offered 180p per share to acquire Deliveroo, a premium of over 20% on its closing price on Friday, valuing the company at £2.7 billion.
Although this represents just over a third of Deliveroo's 2021 London IPO valuation of £7.6 billion, it sent the company's share price up by 5%.
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Deliveroo stated that it has "decided to engage in discussions with DoorDash" and would be "minded to recommend a firm offer" at 180p per share.
However, the company cautioned that "no certainty that any firm offer will be made" and advised shareholders to take no action.
According to the FT, DoorDash made a similar approach for Deliveroo last year. The firm, which has a presence in nine countries after recently pulling out of Hong Kong, reported its first full annual profit in the 2024 results released last month.
Founded in 2013, Doordash is currently the leading takeaway company in the US, operating in over 30 countries and generating revenue of £8.03bn last year. Interestingly, it does not operate in any of the same countries as Deliveroo.
Both companies have been making strides to diversify beyond food delivery, venturing into retail partnerships that include grocery deliveries and non-food items.
Doordash has until May 23 to table a concrete offer for Deliveroo.