Just Eat delivers a £5.8bn tie-up with rival Grubhub
JUST Eat Takeaway has sealed a £ 5.8bn merger with Grubhub that will hand the European delivery giant a slice of the lucrative US market.
If both companies’ investors give their approval, the resulting behemoth will have more than 70m users ordering takeaway curries, pizzas and the like in 25 countries.
The deal would be completed by swapping shares – meaning no cash actually changes hands – and would give Grubhub a 30pc stake in the enlarged group.
The desire for another tie-up may at first seem surprising, given that Dutch group Takeaway was only given the final all-clear from UK authorities for its £6.2bn takeover of Just Eat back in April. But the ability to gain a toehold on the other side of the Atlantic and fending off competition from Uber Eats seem to be major attractions.
The tie-up was completed in a matter of weeks after Just Eat Takeaway boss Jitse Groen got wind that Uber Eats was eyeing up Grubhub.
As well as seeing a lucrative – if crowded – market in the States, Groen also sees Grubhub boss Matt Maloney as his ‘ kinfolk’, describing them both as ‘ the remaining food delivery veterans in the sector’ because they both started their businesses on different continents in the early 2000s.
While management clearly still has an appetite for blockbuster takeover deals – at a time when the industry has seen a surge in orders during lockdown – it’s not yet clear if the investors feel the same.
Activist shareholder Cat Rock praised the arrangement as ‘clever and sensible’, but shares in Just Eat Takeaway fell 3.1pc, or 234p, to 7392p last night. The wider
FTSE 100 was also in the red, led by fresh sell- offs in some of the travel stocks that have been worst-hit by the coronavirus crisis. The Footsie shed 4pc, or 252.43 points, to 6076.7 as the latest downward turn in the market wiped 12pc, or 164.5p off cruise company Carnival, which closed at 1190p, while Easyjet fell 7.1pc, or 58.2p, to 760.2p, and plane engine-maker Rolls-Royce slid 9pc, or 31.7p, to 321.6p.
The FTSE 250 also lost ground, falling 3.6pc, or 631.79 points, to 16973.67.
Mid-cap engineering group and submarine maintainer Babcock sunk 7.7pc, or 31.4p, to 376.6p after swinging to a £178m loss in the year to March 31.
The Ministry of Defence contractor took one- off costs of more than £500m, including a writedown of the value of its business that flies oil and gas workers out to offshore oil rigs and a fine in Italy. The year before it made a profit of £235m.
In addition to falling into the red, it has scrapped any financial guidance and deferred making a decision on its dividend until later in the year.
It wants to see whether shortterm contracts – which make up about 20pc of revenues – will be affected by the coronavirus crisis. Elsewhere, sub-prime lender
Amigo confirmed that its chairman Stephan Wilcke will leave next week after pressure from investor Richmond Group, which is owned by Amigo’s founder James Benamor.
And chief executive Hamish Paton will depart next month.
Board director Roger Lovering will take over as acting chair until the business finds a permanent replacement.
Amigo’s shares fell 5.6pc, or 0.88p, to 14.9p, as the boardroom played musical chairs. Over on AIM, Bahamas Petroleum dived 21.8pc, or 0.72p, to 2.6p, and Columbus Energy fell by 18.8pc, or 0.45p, to 1.95p, after the pair struck a £ 25m all- stock merger to form a Caribbean and Atlantic ‘champion’.