Overnight reports that Deliveroo PLC (LSE:ROO) founder Will Shu is planning to step down as chief executive had little impact on the shares on Wednesday, with a fall of a few pence and then a similar rebound to 140.2p.
Shu is potentially stepping down as CEO at some point this year, Sky News reported, with the board undecided on a replacement.
Carlo Mocci, chief business officer, was stated to be the leading internal candidate
Deliveroo issued a statement mid-morning on Wednesday.
"In response to rumours in the media, the company confirms that there are no plans for Will to step down. Will remains relentlessly focused on the long-term future of Deliveroo and delivering for consumers, merchants and riders," a spokesperson said.
Analysts react
The report was "all a bit speculative so far", said broker Panmure Liberum, with analyst Sean Kealy saying there were a few things to note, including that Shu owns around 6% of the company, "which may eventually come to market in the event that he does step down".
The Sky article suggested this was one of a range of outcomes and that Carlo Mocci would be a fairly well-received replacement, having spent 13 years at McKinsey, seven at Amazon, and five at Deliveroo, currently responsible for the restaurant vertical globally, as well as the advertising business and the UK and Europe more broadly.
"Whichever way you cut it, he looks like the heir apparent and seems to have responsibility for probably somewhere between 80-90% of revenues," said Kealy.
"Other potential candidates would include Eric French, COO, who has been responsible for the grocery and retail operations – both of which are the parts of Deliveroo which are actively growing quickly."
Analyst Giles Thorne at Jefferies said the news "will come as a negative" for the shares, with the company's success down to Shu's "tenacity and leadership".
Deliveroo has been "first" and "right" on every major sector debate, Thorne reckoned, "from the merits of delivery through to the launch of non-food retail.
"We view him as one in a small group of sector CEOs held in the highest regard within the investment community."
A buyer may be put off, Thorne said. "We view Deliveroo as a strategic asset and a potential target in any sector consolidation, and we think Shu's departure would reduce its value to a prospective buyer."
** Update: Company response added **