Delivery Hero Seeks $1.5 Billion in Convertible Bond Sale

(Bloomberg) — Delivery Hero SE is looking to raise as much as 1.25 billion euros ($1.5 billion) from an offering of notes convertible into shares, marking the food-delivery company’s third equity-linked issuance in less than two years.

The company plans to sell notes in two tranches due 2026 and 2029, and has already received enough orders to cover the sale, according to terms seen by Bloomberg. Proceeds will be used for general corporate purposes and to “take advantage of attractive investment opportunities that may arise,” the company said in a statement. 

Eager to lock in cheap financing from investors before bond yields rise further, companies have piled into the equity-linked market this year, with a blockbuster $16 billion raised across Europe, the Middle East and Africa. Delivery Hero’s offering will be one of the biggest in Europe this year.

The Berlin-based company tapped the market in January and July last year, raising more than 3 billion euros across the two fundraising rounds. A company spokesman declined further comment Thursday’s issue.

The company is spending on acquisitions and plans to grow as customers continue ordering food and grocery deliveries even as lockdowns end. Chief Executive Officer Niklas Oestberg has suggested a possible expansion in Germany would impact profitability, and the company also may take a stake in grocery delivery startup Gorillas Technologies GmbH, according to Manager Magazin.  

Last month, Delivery Hero increased its full-year guidance for product sales on its platform after orders rose to a record in the second quarter. It also disclosed the purchase of a 5.1% stake in Deliveroo Plc.  

Read more: Delivery Hero Loss Widens After Growing Food Delivery Reach 

The tranche A notes are being marketed with an annual coupon of 0.5% to 1%, while the tranche B bonds are being offered with a 1.625% to 2.125% interest rate. Both are being sold with a conversion premium range of 40% to 45%. 

Morgan Stanley, JPMorgan Chase & Co., UniCredit SpA and HSBC Holdings Plc are running the sale.

(Updates throughout with context, info from filing)

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