Reuters
—
Europe’s biggest meal delivery firm, Just Eat Takeaway, said on Wednesday it had struck a deal to sell its U.S. unit Grubhub to Wonder for $650 million, sending its shares soaring 20% in early trading.
The Amsterdam-listed company had been looking to offload Chicago-based Grubhub since as early as 2022, after acquiring it in 2020 in a $7.3 billion deal amid a pandemic-driven boom in delivery services — a process that was hampered by slowing growth, high taxes and a question of fee caps in New York City.
“Just Eat Takeaway is at last putting an end to its disastrous U.S. journey,” Bryan Garnier analyst Clement Genelot said, noting the group had destroyed more than $7 billion in shareholder value there.
Grubhub’s enterprise value of $650 million includes $500 million of senior notes and $150 million cash, Wonder said in a statement.
Wonder is a food-delivery startup led by former Walmart executive Marc Lore.
Advanced talks between the two companies were first reported by the Wall Street Journal on Tuesday.
Just Eat CEO Jitse Groen had in February said the M&A environment was not easy in the U.S., where fee caps cost the group some $100 million per year.
Grubhub and U.S. peers DoorDash and Uber Eats have been in a legal battle with New York City over a law capping how much they can charge restaurants for delivering meals.
JPMorgan said in a note it had argued for an about $1.2 billion valuation for Grubhub in the past, but the market would view the long-awaited deal as positive even at a lower valuation.
The transaction is expected to be completed in the first quarter of 2025, and Just Eat said it would not impact its full-year guidance and that it retains no material liabilities associated with Grubhub.
However, analysts said Just Eat might need to exit other markets as well to close the valuation gap with European peers, naming Australia and Canada as options.
Excluding the U.S., Just Eat operates in 18 countries. It exited New Zealand and France earlier this year.
If the gains hold, Just Eat’s shares will see their biggest daily rise since August 2022, wiping out most of their year-to-day losses that stood at 18.1% at Tuesday’s close.
