Just Eat Takeaway is exploring a Grubhub sale

The Grubhub logo displayed on a smartphone screen.

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European food delivery giant Just Eat Takeaway.com said it is considering the sale of Grubhub, its US arm, after facing pressure from investors to explore strategic deals.

Just Eat Takeaway.com’s board “confirms its alignment with shareholders in the desire to create and realize value from the company’s highly attractive portfolio of assets,” the company said in a business update on Wednesday.

“As such, management is currently, along with its advisers, actively exploring the introduction of a strategic partner and/or the sale of all or part of Grubhub.”

Just Eat Takeaway.com said it could not guarantee that such a sale will be agreed, or when it might happen. “Further announcements will be made when appropriate,” she said.

The company has faced mounting calls from prominent shareholders to sell its Grubhub division. Just Eat Takeaway.com completed its acquisition of the US food ordering platform for $7.3 billion just a year ago, bringing Uber and Germany’s Delivery Hero to a deal after a heated takeover battle. .

In October, activist investor Cat Rock Capital asked Just Eat Takeaway.com to sell Grubhub and “refocus its business on Europe.” Cat Rock owns about 6.5% of the company.

Alex Captain, founder and managing partner of Cat Rock, said Just Eat Takeaway.com’s share price has been “deeply depressed”, leaving the company “vulnerable to takeover bids well below its intrinsic value at long term”.

Shares of Just Eat Takeaway.com jumped more than 7% on news of the company’s interest in selling Grubhub. The company has lost more than two-thirds of its market value in the last 12 months.

It’s not the only food delivery company struggling in the stock market lately. Delivery Hero is down 73% in the last year, while Britain’s Deliveroo is down 56%.

Consumer habits are changing after two years of on-and-off pandemic shutdowns, with demand for online food delivery, streaming services and home exercise machines in decline.

Netflix on Tuesday reported a drop in subscribers in the first quarter, marking the first time it has lost paid users since October 2011.

Just Eat Takeaway.com reported a gross transaction value (GTV) of €7.2 billion ($7.8 billion) in the first quarter, up 4% from the same period a year earlier. However, its total number of orders fell 1% to 264.1 million.

The company also revised down its guidance for 2022, with GTV expected to grow by “mid-single digits year over year”; previously it was “mid-teens”. The firm said that growth in the second quarter of the year “will continue to be a challenge.”

Jitse Groen, CEO of Just Eat Takeaway.com, said the company expects profitability to “gradually improve through the year,” reaching positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2023.

“Our priority for 2022 lies in improving profitability and strengthening our business,” Groen said in a statement.

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