Delivery Hero Raises $1.5 Billion in Convertible Bond Sale

(Bloomberg) — Delivery Hero SE raised 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 sold 750 million euros of notes maturing in 2026 and 500 million euros of 2029 securities, 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 is one of the biggest in Europe this year.

Delivery Hero may spend the money on operating or capital expenses, or on acquisitions, Giles Thorne, an analyst at Jefferies, wrote in a note. 

 “Today’s raise promises the near term will be remain busy,” he said. The company has been “masterful” in using its rising stock price to match competitors’ capitalization, he said.

Delivery Hero shares fell 2.6% to 128.40 euros at 9:12 a.m. in Frankfurt. 

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 2026 notes will pay a coupon of 1% annually while the 2029 tranche will pay 2.125%. Both are being sold with a conversion premium of 40%. 

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


(Updates with stock price in sixth paragraph.)

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