Just Eat Takeaway considers selling Grubhub as the outbreak fades According to Reuters

By Toby Sterling

AMSTERDAM (Reuters) – Europe’s largest meal delivery company Just Eat Takeaway.com is considering selling US firm Grubhub less than a year after buying it, under pressure from investors to revive shares in the context of fierce competition and the outbreak of the pandemic.

In an abrupt turnaround, CEO Jitse Groen said Takeaway has hired banks to explore the possibility of selling Grubhub – along with potential partner options the company has explored – and that buyers expressed more than usual interest.

“We’re in talks with the people around this (a sale), but I need to be careful that it doesn’t automatically lead to a transaction,” Groen told reporters.

Takeaway, which paid $7.3 billion to Grubhub in 2021 while losing billions of euros, took a hit as investors reassessed valuations for the losing tech companies and the stocks that were awarded considered to be a great beneficiary of the pandemic.

Its shares, which have lost two-thirds of their value since their October 2020 peak above 100 euros, were up 2.5% to 26.75 euros at 0800 GMT, but still not above the 2016 IPO price of 23 euro.

Investor sentiment towards online food companies has soured since the Grubhub deal ended in June amid expectations that some customers will turn to home delivery during the period. Pandemic will return to the restaurant.

In a trading update, Takeaway said orders fell 1% in the first quarter and it now expects “average single-digit growth” in Total Transaction Value (GTV). ) this year, instead of the “mid-teen” levels predicted in January.

GTV measures the total value of food ordered and delivered.

Takeaway processed 264.1 million orders in the first quarter, compared with JPMorgan (NYSE:) analysts’ estimate of 286 million.

Takeaway’s downgrade of its outlook follows a warning by British rival Deliveroo last week that consumer spending could slow this year amid a squeeze in the cost of living.

Groen said the focus of his operations will be on increasing average order size and cutting costs. “We expect profitability to gradually improve throughout the year and return to positively adjusted EBITDA (core earnings) by 2023,” he said.

Major shareholders including Cat Rock, the second largest company with a 6.88% stake, criticized the purchase of Grubhub and urged Groen to sell it.

Grubhub has a strong foothold in East Coast cities, especially New York, but its profits are affected by the commissions it can charge restaurants during the pandemic.

Takeaway is challenging the legitimacy of the funds, which, according to the company, cost it around 200 million euros a year in lost operating profits.

Last week, hedge fund Lucerne Capital Management, which did not disclose the size of its stake in Takeaway, said it would vote against re-appointing the company’s chief financial officer at its May shareholder meeting to counter accusations of poor communication and weak stock performance. .

(1 dollar = 0.9262 euros)