Delivery Hero facing potential €400m antitrust fine, shares tumble

Delivery Hero tumbled on Monday after saying it might face a fine of more than €400m for alleged anti-competitive behaviour.

In a statement on Sunday, the company said it was planning to "significantly increase" a corresponding provision already built in the amount of €186m following unannounced inspections carried out by the European Commission in July 2022 and November 2023.

"The intent to increase the provision is based on recent informal engagement with the European Commission and subsequent detailed analysis," it said. "Delivery Hero intends to fully cooperate with the European Commission as it did during the unannounced inspections in July 2022 and November 2023."

At 0920 BST, the shares were down 10.6% at €18.78.

Jefferies said in a research note that the fine probably relates to the sale of the Balkans business to Glovo in May 2021, and pre-dates Delivery Hero's eventual December 2021 acquisition of Glovo.

"More to the point, it's another materially negative regulatory development emanating from the latter acquisition (the other being the ongoing fines levied against Glovo in Spain for rider misclassification)," it said.

"The biggest challenge for the market here is not the materiality of the fine (circa 6.5% of the market cap), nor in DH's ability to pay it (1Q24 proforma liquidity was €1.8bn), but in the fact pattern that it creates.

"The prompt disclosure of the potential fine and the decision to significantly lift the related provision is a welcome first response from management."