Shares of Zomato fell up to 6.8 percent on Wednesday, in their biggest drop in more than a week, a day after reports said that Uber Technologies planned to sell its entire stake in the Indian food delivery firm.
Uber is the likely seller of a 7.8 percent stake in Zomato being disposed of via a $373 million (roughly Rs. 2,940 crore) block deal, a source with direct knowledge of the matter told Reuters on Tuesday.
The offer size of 612 million shares worth $373 million (roughly Rs. 2,940 crore) is based on the lower end of a price range of Rs. 48 – Rs. 54 set for the block deal, according to a term sheet seen by Reuters.
Uber and Zomato did not immediately respond to Reuters requests for comment.
BofA Securities is the sole bookrunner for the deal. The term sheet did not name the potential seller.
About 12.1 million shares were exchanged in a block deal priced at Rs. 52.5 in pre-open trade, according to Refinitiv Eikon data.
Zomato shares were last down 1.5 percent at Rs. 54.7, with more than 232 million shares traded, twice their 30-day average.
On Monday, an internal company memo of Zomato seen by Reuters revealed that the Indian food delivery company backed by China’s Ant Group is considering to revise its management in a way that each of its individual businesses would have its own CEO. The Indian food delivery company’s memo also mentioned about changing the parent company name to “Eternal”.
Zomato’s CEO Deepinder Goyal in the memo stated that the company was now not only running the Zomato food delivery business but also other large businesses.
Goyal said these included Zomato’s proposed purchase of grocery-delivery startup Blinkit, kitchen and food ingredients supply business Hyperpure, and Feeding India, a not-for-profit firm that aims to reduce hunger in India’s poor communities.
“We are transitioning from a company where I was the CEO to a place where we will have multiple CEOs running each of our businesses…all acting as peers to each other,” Goyal said in the memo.
© Thomson Reuters 2022
