Deliveroo PLC (LSE:ROO) shares jumped 3.5% this morning after it was revealed US delivery company DoorDash Inc (NYSE:DASH) may be interested in a takeover.
Last month, Doordash approached Deliveroo but the two sets of management failed to come to an agreement over the valuation, reports from Reuters revealed.
Deliveroo shares have slumped by around 68% since it hit all-time highs in August 2021 amid the pandemic-led boom in takeaways.
Now the company is struggling to generate the same demand from hungry people who can't or don't want to leave home.
Talks between the two are no longer ongoing, but analysts believe the valuation gap between US delivery services and their UK counterparts could drive further M&A activity.
"In this instance, the talks have failed. But such is the strength of the financial, industrial and strategic logic of a Deliveroo takeover, we would not be surprised to see similar such headlines re-emerge in the short term," Jefferies said.
Deliveroo's largest shareholders include Amazon, with more than a 13% stake, DST Global, which owns 7.5%, and co-founder and chief executive Will Shu, with a 6.5% holding.