Shares in Germany's Delivery Hero (ETR:DHER, OTCQX:DLVHF) fell 5.5% after announcing potential EU fines of more than €400 million for anti-competitive behaviour with the ripples felt across the European fast food sector.
Shares initially dropped 17%, after it emerged regulators were investigating the company's alleged market-sharing agreements, sensitive information exchanges, and no-poach deals, prompting Delivery Hero (ETR:DHER, OTCQX:DLVHF) to increase its previous €186 million provision.
Inspections by the EU Commission in 2022 and 2023 led to this increased provision.
Delivery Hero said it plans to fully cooperate with the investigation. Analysts noted this announcement could delay the company’s goal of achieving positive free cash flow by 2024.
Here in the UK, rival Deliveroo PLC (LSE:ROO) was off 1.7% at 129.3p, while Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) was down 0.2% at 974p.
The latter was hit with a share price target downgrade to 1,700p from 1,880p by Deutsche Bank, which remains a 'buyer' of both JET and Deliveroo.
"We think Deliveroo is best positioned in this respect and expect an encouraging first-half update ahead," said Deutsche.
"Based on our survey, Continental Europe seems to be faring better instead, especially Spain and Italy."