Grubhub has two new suitors, Just Eat Takeaway and Delivery Hero, as Uber stalls
Published Fri, Jun 5 20201:16 PM EDT
Updated 12 min ago
Alex Sherman @sherman4949
CNBC.com
Key Points
-- Grubhub has received interest from at least two European companies -- Delivery Hero and Just Eat Takeaway.com -- as potential acquirers, according to people familiar with the matter.
-- A deal with a European buyer would likely be an easier sell to regulators.
-- Uber’s talks with Grubhub continue and could still strike a deal to buy the third-largest U.S. delivery service.
Grubhub is fielding interest from at least two European food delivery companies as antitrust concerns have clouded the chances of an Uber acquisition, according to people familiar with the matter.
Netherlands-based Just Eat Takeaway.com and German company Delivery Hero have expressed interest in merging with Grubhub, according to people familiar with the matter, who asked not to be named because the discussions are private.
Shares of Grubhub were up nearly 8% on the news by mid-afternoon on Friday.
Just Eat Takeaway.com is working with Bank of America as an adviser, the people said.
Spokesmen at Just East Takeaway and Bank of America declined to comment. A Delivery Hero spokesman declined to comment on specifics but added, “As the world’s leading local delivery platform, we are committed to invest in sustainable growth and gain leadership positions in the markets we operate in. Being a global leader in the delivery industry, we are regularly looking at potential transactions to evaluate new opportunities.”
A spokesperson at Grubhub couldn’t immediately be reached for comment.
U.S. food delivery services have struggled to make money as executives have talked openly of consolidation. Just Eat Takeaway.com has a market capitalization of more than $6 billion after U.K. delivery service Just Eat merged with Amsterdam’s Takeaway.com earlier this year. Delivery Hero has a market value of nearly $17 billion.
Grubhub, with a market valuation of about $5.4 billion, has been in talks with Uber on a sale. Those discussions are ongoing and may still result in a deal. Uber and Grubhub have been haggling over a breakup fee given the deal’s antitrust risk, Bloomberg reported. Uber is still confident it can get a deal done, two of the people said.
Grubhub is weighing multiple offers, some of which are all-stock and some that are both cash and stock, one of the people said. The company is mulling the right deal structure with potential buyers given market conditions and regulatory risks, two of the people said.
Grubhub generates most of its revenue from the U.S., serving more than 1,600 U.S.cities, but it’s also operational in London. A deal with a European-based company would likely carry far lower regulatory risk than merging with Uber, which would combine the first and third largest U.S. food delivery services and control about 55% of the market, according to Wedbush Securities. DoorDash is the second-largest U.S. food delivery service by market share.
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