Amazon is to cut its stake in Deliveroo from 15.8 per cent to 11.5 per cent after it goes public next month, according to plans outlined in the food delivery company's IPO prospectus.

The UK-based online business has set a price range for its shares between £3.90 and £4.60 each, valuing the company between £7.6 billion and £8.8 billion.

Last week the company confirmed its plans sell approximately £1 billion worth of new shares, as well as around £128 million from existing shareholders.

Amazon will sell roughly 23.3 million shares, which will enable the tech business to raise between £90 million and £107 million.

Legal challenges big risk for Deliveroo

In its public offering document, the company said that it would be “adversely affected” if its rider model was successfully challenged and it was legally obliged to reclassify riders as employees.

“The independent contractor status of riders, which applies in most of the jurisdictions in which we operate, has been and continues to be the subject of challenge in certain markets, including in our key markets,” said Deliveroo in its IPO statement. “Consistent with other operators in the gig economy, we have been and are involved in legal proceedings, including individual and collective legal claims and investigations, audits or claims by labour, social security, pension and/ or tax authorities, under which it is claimed, amongst other things, that riders are (or have in the past been) engaged as employees (or, where applicable, as workers or quasi-employees), rather than as independent contractors.”

The company is currently engaged in proceedings in a number of countries, including the UK, France, Spain, the Netherlands, and Italy.

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