LONDON (Reuters) – Amazon.com is to cut its stake in Deliveroo to 11.5% from 15.8% when the British food delivery company goes public via an initial public offering, its IPO prospectus said.
Deliveroo this week began roadshows for its London IPO and set a price range of between 3.90 and 4.60 pounds per share, giving it a market value of between 7.6 billion pounds and 8.8 billion pounds ($10.46 billion-$12.11 billion).
This includes the sale of new shares to raise 1 billion pounds and about 128.2 million shares from existing shareholders at the final price.
The prospectus said Amazon is set to shed around 23.3 million shares as part of this, allowing the tech group to raise between 90.87 million and 107.18 million pounds from the deal.
Amazon raised its stake in Deliveroo to 16% last year in a transaction that had to be cleared by the UK’s competition watchdog.
The U.S. company also participated in a $180 million private funding round in January that valued the Deliveroo at more than $7 billion.
Other selling shareholders in the IPO include Index, DST, Greenoaks, Bridgepoint and Accel.
Deliveroo founder Will Shu is retaining his 6.3% stake, but will have a 57.5% of the voting rights of the company because of a dual-class share structure.
The structure, which is relatively new to London, has meant that Deliveroo is aiming for a standard London Stock Exchange listing as opposed to a “premium” listing that gives companies access to the FTSE indices.
If recommendations of a review by former European Commissioner Jonathan Hill are implemented later this year, companies with a dual-class structure will be able to obtain a premium listing.
Deliveroo customers are allowed to participate in the IPO through a 50 million pound “community offer”, a first for the London Stock Exchange.
Shares in the community offer will start trading a week after the stock market debut, when “unconditional” trading begins on April 7, while, institutional investors can begin trading the shares on March 31, the prospectus stated.
Deliveroo said in the prospectus that it is involved in legal proceedings in a number of countries, as it faces challenges around the status of its drivers as independent contractors.
“The independent contractor status of riders, which applies in most of the jurisdictions in which we operate, has been and continues to be the subject of challenge in certain markets, including in our key markets,” Deliveroo said.
The company is engaged in such proceedings in a number of the countries in which it operates including the UK, France, Spain, the Netherlands and Italy, it said.
Reporting by Abhinav Ramnarayan; Editing by Rachel Armstrong and Jane Merriman