Uber may exit Zomato in Rs 3,300-crore block deal

The food-tech startup platform, now a unicorn, is also reorganising its management to move to a multiple CEO structure and renaming the parent company ‘Eternal’.

Uber may exit Zomato in Rs 3,300-crore block deal
Uber is expected to make gains of at least 2.5 times from the block deal.

Uber Technologies is likely to exit food delivery aggregator Zomato through a block deal on Wednesday. The 7.8% stake sale is expected to fetch as much as Rs 3,305 crore at the upper end. At the lower end, the deal size could be Rs 2,938.6 crore.

Uber had acquired this stake when it had sold off its food delivery arm Uber Eats to Zomato. The stock transaction deal was valued at Rs 1,376 crore at that time.

Uber is expected to make gains of at least 2.5 times from the block deal.

The deal will open on Wednesday and the expected settlement date is August 5. The seller is putting 612 million, or 7.8%, total outstanding shares of Zomato on the block, according to the term sheet seen by FE.

The offer price for the deal is at Rs 48-54 a share, which is at a 2.8-13.6% discount to Zomato’s share price as of close on Tuesday. The offer size of Rs 2,938.6 crore is based on the lower end of the price range and Rs 3,305 crore at the upper end.

BofA Securities is the sole bookrunner to the deal.

While the name of the seller wasn’t disclosed in the term sheet, sources told FE that Uber was offloading its entire 7.8% stake through the bulk deal. A number of US-based institutional investors are already in the fray to acquire the shares, sources added.

The block deal also comes a week after the one-year lock-in-period for pre-IPO shareholders of Zomato ended on June 23. Uber’s exit would be the first by a pre-IPO investor in the company.

The offloading also comes on the back of Zomato targeting an Ebitda breakeven as an entity, with a timeline of the final quarter of FY23 or by the second quarter of FY24. The food-tech startup platform, now a unicorn, is also reorganising its management to move to a multiple CEO structure and renaming the parent company ‘Eternal’.

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