UK markets closed
  • NIKKEI 225

    +365.53 (+1.33%)

    +407.75 (+2.06%)

    +0.07 (+0.10%)

    -7.30 (-0.37%)
  • DOW

    +219.02 (+0.68%)
  • Bitcoin GBP

    +1,163.49 (+5.33%)
  • CMC Crypto 200

    +15.90 (+2.65%)
  • NASDAQ Composite

    +145.35 (+1.24%)
  • UK FTSE All Share

    +44.17 (+1.08%)

Deliveroo IPO to list at bottom end of projected range

DUBLIN, IRELAND - 2021/02/13: Deliveroo couriers seen in Dublin city center, during the COVID-19 pandemic lockdown.
Level 5 lockdown restrictions are set to be extended by Irish Government, by at least another six weeks with only schools and the construction sector likely to be allowed to reopen before Easter. (Photo by Cezary Kowalski/SOPA Images/LightRocket via Getty Images)
The final pricing for Deliveroo's IPO is expected to close at midday on Tuesday. Photo: Cezary Kowalski/SOPA Images/LightRocket via Getty Images

Confirmation that Deliveroo will price its initial public offering (IPO) at the bottom end of its proposed price range has started to filter through from funds and City banks.

Reuters reported that banks involved in the deal confirmed on Tuesday the offering would come in a 390 pence per share, giving a value of £7.6bn ($10.5bn).

The bookrunners said that the final pricing is expected to close at midday on Tuesday.

On Monday, the startup had said it cut its potential valuation, following a revolt from the City of London over the company's treatment of drivers. This knocks up to £1bn off the potential value of the company.

The food delivery startup previously set a range of £3.90 to £4.90, valuing the business at between £7.6bn and £8.8bn.

The loss-making startup said on Monday it was narrowing its share price range to between £3.90 and £4.10, citing "volatile" market conditions. The new range gave the company a market cap range of between £7.6bn and £7.85bn.

The IPO is set to be London's biggest IPO since mining company Glencore's (GLEN.L) nearly a decade ago and the largest tech float on the London Stock Exchange.

Watch: Deliveroo eyes $10.5 bln listing, some funds wary

READ MORE: Hedge fund blowup sends shockwaves through Wall Street and the City

The decision to lower its potential valuation came amid a revolt among institutional investors over the company's treatment of drivers. Several of the City of London's biggest money managers — including Aviva (AV.L), Aberdeen Standard Life (SLA.L), L&G (LGEN.L), and M&G (MNG.L) — have publicly said they will not take part in Deliveroo's IPO.

The decision to cut the valuation comes as recent tech IPOs in both the US and Europe have faced headwinds. Several US floats priced last week were below their initial offer prices and Trustpilot (TRST.L), one of the UK's highest profile floats this year, sank below its IPO price on the second day of dealing.

"A lack of blockbuster listings in London and pent-up investor demand during the pandemic have created encouraging market dynamics for Deliveroo," said Nalin Patel, EMEA private capital analyst at PitchBook.

"However, near term volatility facing public equities and questions surrounding workers’ rights have impacted IPO pricing and investor participation."

Watch: What are SPACs?