Deliveroo shares: what does the future hold?

(Video Transcript)

Takeover talk has takeaway delivery firm rising

Now, Deliveroo shares are rising after reports that activist investor Sachem Capital believes that the delivery company could now be a takeover target. Let's take a look at the reaction for you.

It was up some 5% earlier on those reports, now up 3.2% on the IG platform. Let's give you an hourly view just to show you a better picture of the reaction there. That's the early view and the reaction after those reports.

One of them coming from Bloomberg, which is now saying that Deliveroo is looking at a defence strategy before the dual-class set-up ends.

What's interesting with this activist Sachem Capital is that this is the first time, I believe, that they've come out and said that Deliveroo could be a takeover target because this has been talked about a great deal in the market, however, we've not had any concrete details.

Many contenders in meal-delivery space

As we know, this meal-delivery space, especially in Europe, has become rather crowded and there have been a lot of mergers and acquisitions (M&A) action.

For example, we had Just Eat Takeaway and many of these companies, including Deliveroo and Just Eat, have actually had to really realign their business strategy. They've had to cut costs and also transition to a new model after the lockdown.

The question now is if Deliveroo can stand on its own two feet ahead of these advances, if there are any.

It must be said that Deliveroo has had a difficult time in terms of its bottom line. Its chief executive says the new delivery company is now close to generating sustainable real cash flow after better-than-expected earnings in its first half.