British meal delivery company Deliveroo said it received a proposal on Friday from the US Piadre Dash on April 5 to buy all of its shares for £2.7 billion ($3.6 billion).
Deliveroo has announced that its board has reviewed Doordash’s proposal and is likely to recommend it to shareholders, subject to agreeing to other terms of the offer.
Doordash must make a solid offer by May 23rd. The company did not immediately respond to Reuters’ requests for comments.
JPMorgan advises Doordash, according to sources familiar with the issue. The current offer marks the first formal approach since the last report of the summer, sources added.
Derriboroo’s stock has weakened nearly 50% since its debut in 2021 after demand for online food delivery has stagnated after the pandemic and investors have shifted to more profitable companies.
In March, Derveroo announced an exit from Hong Kong, selling some assets to streaming hero Foodpanda. Hong Kong’s business is adding losses, accounting for around 5% of the company’s overall transaction.
This transaction is expected to not face regulatory hurdles as it provides doordash access to 10 new markets that do not currently exist and creates a highly complementary footprint.
Last year, Reuters reported that Doordash had expressed interest in the acquisition of Deliveroo, but sources said the discussion ended after differences in opinion over the assessment.
The deal between the two companies will help Doordash solidify its European footprint after buying Finland-based rival Wolt Enterprises in 2021, then in a total stock deal of around $8 billion.
