Delivery
Hero
(DHER)
stocks
soared
nearly
20%
Tuesday
morning
on
news
that
the
company
is
selling
Foodpanda
in
Taiwan
to
Uber
Technologies
(UBER)
for
$950
million.
Separately,
the
companies
have
entered
into
an
agreement
for
Uber
to
purchase
$300
million
in
newly
issued
ordinary
shares
of
Delivery
Hero.
The
deal
took
markets
by
surprise
as
negotiations
between
the
two
companies
were
terminated
in
February
after
the
parties
could
not
agree
on
terms.
“We
view
the
proposed
deal
as
a
positive
for
narrow
moat
Delivery
Hero,
as
the
company
can
use
the
cash
to
strengthen
its
balance
sheet,”
says
Morningstar’s
senior
equity
analyst
Ioannis
Pontikis.
“We
also
think
the
price
paid
at
0.6
times
EV/GMV
is
fair
(compared
to
DHER’s
EV/GMV
of
0.3).
Uber
has
also
agreed
to
purchases
$300
million
in
newly
issued
stock
at
a
30%
premium
from
Delivery
Hero,
a
vote
of
confidence
to
DHER’s
outlook
by
one
of
the
largest
players
globally,”
he
adds.
The
deal
needs
to
go
through
antitrust
approval
and
is
targeted
to
close
in
the
first
half
of
2025.
If
the
deal
receives
the
green
light,
it
will
create
a
virtual
monopoly
with
Uber
Eats
controlling
around
80%
of
Taiwan’s
market.
Key
Morningstar
Metrics
for
Delivery
Hero
•
Fair
Value
Estimate:
34.00
EUR
•
Current
Price:
30.60
EUR
•
Morningstar
Rating: ★★★
•
Morningstar
Economic
Moat
Rating:
Narrow
•
Morningstar
Uncertainty
Rating:
Very
High
The
German
online
food
delivery
company
reported
strong
first
quarter
revenues
and
upgraded
its
growth
guidance
on
April
25.
“DHER
reported
a
stronger-than-expected
start
to
the
year,
with
a
beat
on
GMV
and
segment
revenue,
and
raised
its
segment
revenue
guidance
while
confirming
the
adjusted
EBITDA
guidance
range
for
FY24,”
according
to
Silvia
Cuneo
and
Nizla
Naizer,
research
analysts
at
Deutsche
Bank
Research.
The
MDax-listed
stock
has
gained
17%
year-to.date
(as
of
May
13)
and
outperformed
the
STOXX
600
(up
8.87%).
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