Shares of German food delivery company Delivery Hero fell to a record low Tuesday after announcing it was selling its minority stake in rival firm Deliveroo.
Delivery Hero said late Monday that it would sell 68 million Class A ordinary shares in Deliveroo, one of the U.K.'s largest food-ordering services, at a price of £1.13 per share, or $1.43.
That represents a 7% discount to the £1.22 Deliveroo closed at Monday.
The stake sale will fetch roughly £76.8 million for Delivery Hero. The proceeds represent less than a third of what Delivery Hero paid for the shares when it first bought them in 2021, Reuters reported.
Deliveroo shares reacted negatively to the news, plunging as much as 7% Tuesday. Delivery Hero shares sank nearly 6% to hit a record low.
The German firm said it was selling its stake in Deliveroo to better focus on its allocation of cash.
Deliveroo said in a trading update earlier this month that its 2023 annual earnings would come in "slightly" ahead of the £60 to £80 million, or $76 million to $101 million, it had guided earlier.
The value of orders on its platform were forecast to rise 3%, Deliveroo said at the time, in line with guidance.
Shares of Deliveroo had a decent performance in 2023, climbing over 30%, off the back of a broader recovery in technology shares.