Takeover: Just Eat Takeaway swallows GrubHub – GrubHub share strong, Just Eat share falls in double digits | message
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The British-Dutch company Just Eat Takeaway.com takes over the US rival GrubHub. This means that Uber, the driver of the transport service, who was a likely buyer of GrubHub, does not get a chance. According to US media reports, the German competitor Delivery Hero is also showing interest.
Just Eat Takeaway wants to pay the purchase price entirely in own shares and accepts a premium of 27 percent on the latest closing price of GrubHub. The companies agreed on $ 75.15 per share, as announced after the US exchange closed Thursday night. This means that GrubHub will be valued at approximately $ 7.3 billion (€ 6.4 billion) at the time of the takeover.
According to the company, the merger will create the largest food delivery group outside of China. The transaction is expected to close in the first quarter of 2021.
Investors reacted to the planned takeover with mixed feelings
GrubHub shares reacted in NYSE trading on Thursday with an increase of 5.69 percent to $ 62.41, but are thus well below the $ 75.15 offered.
One reason could be the planned payment in shares of Just Eat Takeaway. Many investors prefer to take over cash.
Analyst Hubert Jeaneau from the Swiss grobank UBS also referred to the fierce competition in the food delivery market. However, the US market in particular also offers plenty of opportunities. Just Eat Takeaway’s shareholders also seem to see positives and negatives. The stock price fluctuated between gains and losses on Thursday. Recently, the papers fell by around half a percent.
According to media reports, the competitor Uber had already initiated takeover talks with GrubHub in February. Because: The travel agent wants to expand its delivery offer Uber Eats. Food delivery business is booming, particularly in the Corona crisis. A merger of GrubHub and Uber Eats could have failed due to competition concerns, however, because both are primarily active in the US market. This problem should not exist now, since Just Eat Takeaway is not represented there at all.
After the deal was announced, Uber said the industry needed consolidation. “It doesn’t mean that we’re interested in every deal, at every price, with every player.” According to previous media reports, Uber offered $ 68 per GrubHub share.
According to information from the “Financial Times”, Uber had already tried to take over the GrubHub rival DoorDash last year, but flashed off. Even after GrubHub swallowed several competitors like Eat24 or Foodler, the company is still smaller than DoorDash in the US market.
Just Eat Takeaway itself was only created in the spring, also through a merger. The Dutch company Takeaway took over the British competitor Just Eat.
After the heavy losses the day before in the wake of the impending takeover of the US food delivery service GrubHub, Just Eat’s Takeaway.com papers finally gave way on Thursday. Market participants see risks.
After a weak start, the shares of the British-Dutch company on Euronext were initially turned positive, but then returned their profits and closed 3.8 percent in the red. Just Eat Takeaway.com’s paper had reacted to the official announcement of takeover talks the previous day with high price losses in the double-digit percentage range.
The deal was announced in the night of Thursday. Just Eat Takeaway and Grubhub agreed on a purchase price of $ 75.15 per share. Grubhub is valued at approximately 7.3 billion dollars (6.4 billion euros) during the takeover. Just Eat is thus paying a premium of 27 percent on the latest pit lift closing price. Grubhub’s papers recently rose in New York by around five percent.
According to the company, the merger will create the largest food delivery group outside of China. Actually, the travel agent Uber with its service Uber Eats was considered the favorite for a takeover of the mine, according to US media, the German competitor Delivery Hero is said to have shown interest.
On Thursday, Delivery Hero’s stocks closed only slightly in a very weak overall market. Analysts had previously described the likelihood of Delivery Hero expanding into the US market as low. They had only made further advances in Asia at the end of last year and had secured the majority in the South Korean Woowa.
The experts were initially initially surprised by the Just Eat grubhub deal. The potential for synergies is limited and the market is very competitive, wrote Hubert Jeaneau from the Swiss bank UBS. Just Eat Takeaway has to invest a lot here, with uncertain results. On the other hand, the US market also offers great opportunities.
JPMorgan analyst Marcus Diebel argued similarly. Barclays was also surprised to find a European food delivery service venturing into the US market. Jefferies expert Giles Thorne wrote that it should not be an easy task to convince Just Eat Takeaway.com’s shareholders of the deal.
/ hbr / DP / he
AMSTERDAM / CHICAGO (dpa-AFX)
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