Deliveroo today set its stock market flotation price at the very bottom end of the range it originally suggested.
Having at one stage said it could go for as much as £8.8 billion, today it said it would float this week at £7.6 billion, or 390p a share.
The company had revised the pricing range down yesterday to 390p-410p, having originally set it at 390p-460p.
The listing will still be the biggest float in London for a decade but has provoked a row over workers’ rights in the gig economy.
Deliveroo has refused to recognise its riders as “employees”, with all the benefits such as sick pay and holiday pay that carries. Instead, it says they are self-employed.
A growing number of big investment firms from M&G to Aviva have refused to back the IPO citing concerns regulators will order it to move to the more expensive employment contracts.
Deliveroo yesterday narrowed the upper range of its potential IPO price £8.8 billion down to £7.85 billion but today’s decision to opt for an even lower price will raise eyebrows about the progress of the IPO.
Last week, the company said it had received enough orders from investors to get the float fully backed all the way up to £8.8 billion.
While many in the City say it opted for the lower price because of investors’ concerns about the working conditions issue, Deliveroo said it was due to choppy markets and a desire to avoid a situation where the shares fall after the IPO.
That was the fate of Trustpilot, whose stock fell below its float price last week.
Yesterday saw shares in rival delivery firms Delivery Hero and Just Eat Takeaway fall 2.5% and 1.5% respectively as part of a wider sell-off of tech companies.
