Updated June 10th: CNBC is reporting that the deal between two of the biggest delivery companies may be off due to anti-trust concerns.
The WSJ says sources close to the matter say that Grubhub may still merge with another company and most likely will be Netherlands based food-delivery company, Just Eat Takeaway.com, instead. The deal is reported to be an all-stock transfer.
Food-delivery firm Just Eat is nearing a deal with Grubhub, which would turn its back on talks with Uber, people familiar with the matter said https://t.co/6z1vROz4Ib— The Wall Street Journal (@WSJ) June 10, 2020
Both Grubhub and Uber were trading down this morning as the news broke of the collapsing deal although both stocks are trading higher than they were back on Jan 1st, 2020 of this year.
Lawmakers had expressed concerns about the deal and The Street cited Rep. David Cicilline of Rhode Island and chairman of the House Judiciary Committee's antitrust subcommittee, as saying this is "a new low in pandemic profiteering."
Originally Posted May 12: Sources familiar with the matter are reporting that Uber is making a takeover bid for Grubhub, shooting the food delivery stock to new heights amidst the rumors. The stock is currently trading 30% higher after multiple pauses for volatility.
Breaking: Uber is seeking to acquire GrubHub in a deal that would unite two of the biggest players in meal delivery, people familiar with the matter say https://t.co/pzCO0vx7mE— The Wall Street Journal (@WSJ) May 12, 2020
If Uber were to acquire Grubhub, the two companies would be far ahead of other industry players Doordash and Postmates. Uber and Grubhub could have a combined market cap higher than $65 billion compared to Doordash which was reported valued around $13 billion last November.
Bloomberg reported that the deal 'could reach an agreement as soon as this month' from anonymous sources.
Grubhub released the following statement via newsire:
"While our policy remains to not comment on specific market rumors, we want to reiterate our views with respect to M&A-related matters given the current level of recent speculation.
"We remain squarely focused on delivering shareholder value. As we have consistently said, consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities. That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment."
This comes at a time that multiple states and jurisdictions are capping fees including San Francisco, Seattle, Washington D.C. and more to potentially follow including Los Angeles, Boston, and New York City.
Grubhub reported record new users to its platform at the end of March and April according to its latest shareholder letter. It reported 516,300 daily average grubs, $1.6 billion in gross food sales, and 23.9 million active diners at the end of the first quarter of 2020. They also reported higher restaurant partnerships for Tier 2 and Tier 3 cities and excluding New York City, Tier 1 cities restaurant partnerships were equal compared to pre-COVID-19.