Takeaway delivery company Deliveroo PLC (LSE:ROO)'s share price rose by more than 9% this morning after it proposed a tender offer to buy £250 million of stock and return that money to shareholders.
The company first announced its intention to return capital to shareholders in August, in addition to a £50 million share buyback announced in March, and said today that it will price its tender offer at between 115p and 135p per share.
In total, Deliveroo intends to return £300 million to shareholders in 2023, equal to about 30% of its net cash at the start of the year.
Deliveroo plans to buy more than 217 million class A ordinary shares from shareholders to deliver that value.
It said the price range represents a premium of between 6% and 24% on the closing price of its class A ordinary shares on 26 September 2023.
The price is a discount of 3% compared to a premium of 14% to the volume-weighted average price of its class A shares over the last 90 days through to that date.
The tender will open on Friday and close on 27 October 2023, with proceeds expected to be delivered to shareholders in early November.