Hamburg The Dax-Group Delivery Hero uses the price increase of the past weeks for a capital increase. The supplier company will issue up to almost 9.5 million new shares, announced the Berliners on Wednesday evening. That is 4.7 percent of the share capital.
At the closing price of 138.35 euros, the Berlin company could take 1.3 billion euros. After the announcement, the share turned into the red: In Frankfurt late trading, it fell by seven percent. The share, which has been listed in the leading index Dax since last year, reached an all-time high on Tuesday.
CEO Niklas Östberg wants to use the money not only for “general corporate purposes”, but also to prepare for further takeovers. Delivery Hero only received the green light from the South Korean antitrust authorities shortly before the turn of the year to take over the local delivery service market leader Woowa.
However, the company pays for the € 3.6 billion purchase in part in its own shares. Part of the strategy is to swallow competitors in other countries in order to become the market leader.
Delivery Hero went public in 2017 and raised one billion euros at the time. The purpose of listing on the stock exchange is also to be able to finance growth by issuing new shares – after all, the group has been making steady losses since its foundation.
For the Korea deal, for example, the company raised around 2.2 billion euros in convertible bonds and a capital increase on the market in January 2020. So far, this type of financing has worked without any problems.
Share also sags for technical reasons
There are also technical reasons that the share fell after the announcement on Wednesday: After all, there are more shares on the market after a capital increase, so the value of the shares is diluted. However, the share has risen significantly in recent weeks – also fueled by the decision of the Korean antitrust watchdog at the end of December.
In the new year, however, according to analysts, company boss Östberg must succeed in showing a clear path towards profitability: He must prove to conservative DAX investors that even a growth-oriented former start-up can belong in the leading index in the long term.
However, neither the analysts nor the managers themselves expect a profit: For 2021, the group expects an adjusted loss margin (Ebitda) of 14 to 18 percent. However, this is offset by a proud doubling of sales to a good 2.7 billion euros – if everything goes according to plan. After all: In the crisis year 2020, Delivery Hero maintained its growth rate of 100 percent and was even able to exceed financial expectations.
In 2021, Östberg primarily wants to reorganize business in Asia. The acquisition in Korea is to become a technology platform for the continent in Singapore. The founder expects growth and more efficiency from this. Investors’ money could also flow into such investments – and thus, if everything goes well, pay off.
The capital increase also indicates that the group could quickly make acquisitions worldwide if the opportunity arises. The Berliners should be good for surprises in 2021.
More: Cartel clearance in Korea: A crucial year is ahead for Delivery Hero