(Bloomberg) -- Delivery Hero SE is raising as much as $1.6 billion in a share sale, giving it a potential war chest for deals as it moves to complete its acquisition of South Korea’s largest food delivery platform and strengthen its position in the fast-growing Asian market
The German company said it will sell as many as 9.44 million new shares in an accelerated offering to bolster its cash position and take advantage of “attractive investment opportunities,” according to a statement. Delivery Hero has gathered enough investor orders for all the shares on offer, according to terms of the deal seen by Bloomberg News.
Food delivery companies have gained from consumers ordering from home during the coronavirus pandemic, but the sector remains marked by intensifying competition and a fight to secure greater market share.
Based on the food delivery company’s closing price on Wednesday, the deal could be worth as much as 1.3 billion euros ($1.6 billion). Shares in this type of transaction are usually sold at a discount. The company’s shares were down 3.5% on Germany’s Tradegate exchange compared to Wednesday’s close on the Frankfurt exchange.
In late 2019 Berlin-based Delivery Hero, which claims to be the largest food delivery provider outside China, announced plans to take majority control of Korea’s Woowa Brothers Corp. at a $4 billion valuation, expanding its foothold in Asia. The investment would help Woowa go up against SoftBank Group Corp.-funded competitor Coupang, which has also invested aggressively in food delivery.
In late December South Korea’s antitrust watchdog ordered Delivery Hero to sell its local unit before proceeding with its planned acquisition of Woowa.
JPMorgan Chase & Co. and Morgan Stanley are the global coordinators on the share offering, alongside bookrunners HSBC Holdings Plc and UniCredit SpA.
(Updated throughout.)
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