Dividends and Deliveroo Aims for $12 billion market cap

When you think about Britain or the UK, one of the concerns you have tends to be how is it doing since Brexit or Britain’s break from the European Union. There was never a concern that Britain would continue, but can Britain continue to attract billion dollar market cap companies to help grow the economy.

For the moment, the answer is yes it can. Reuters reported food delivery company Deliveroo would be the biggest IPO in a decade. The commodities giant Glencore went public in the UK and since attracted over commodity companies.

Deliveroo is partly owned by Amazon (before the IPO 15.8%, afterwards 11.5%) and by going public in London, the British government is shouting from the mountain tops that Britain is still open for business and can attract major IPOs. The City is alive and well.

When Deliveroo goes public, about $1 billion will be for the company and the rest will be made by existing shareholders selling part of their stakes. (The existing shareholders are selling 128.2 million shares including Amazon selling 23.3 million). Deliveroo has opted not to pursue a premium listing which means it will not be in the FTSE indexes.

Given the pandemic, Deliveroo has seen total gross transaction value on its platform go up 121% compared to the year before. You will remember the pandemic started in late March.

JPMorgan Chase and Goldman Sachs are the global co-ordinators and bookrunners. Bank of America, Citigroup, Jefferies and Numis Securities have secondary roles.

Linking to dividend paying stocks, when ever there is a big change from the government, everyone wonders what the affect will be. People are neither all correct or all wrong, it usually comes in the middle. With Brexit, there was a concern Britain would only attract second tier IPOs and the larger companies would shift to either Germany or France. Companies have to move through the changes and come out ahead and consistently profitable companies have a great advantage is they have operated through many changes. You lower your risk by investing in them.

There are more questions than answers, till the next time – to raising questions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s