Amazon tie-up delivers for Just Eat shareholders
SHARES in Just Eat soared after it unveiled a major deal between its US business and e-commerce giant Amazon.
As global stock markets staged a rebound from recent sell- offs with traders apparently overlooking the turmoil in Westminster and global recession worries to go bargain-hunting, Just Eat gained 13.8pc, or 163.6p, to 1351.4p.
The rise came after it announced American subscribers to Amazon Prime would be able to sign up for a free, one-year membership to Grubhub+, the company’s own service that offers free delivery from hundreds of thousands of restaurants.
In return, Amazon will take a 2pc stake in Grubhub, and an option to acquire a further 13pc of the business. Just Eat expected the deal will boost its earnings from 2023. It added that it was continuing to explore a possible sale of Grubhub.
The deal with Amazon provides some relief for investors, including Just Eat’s second-largest shareholder and activist Cat Rock Capital, who have been pushing it to offload Grubhub and focus instead on European operations.
The pressure has ratcheted up amid a steady decline in the share price, which over the last 12 months has fallen nearly 80pc.
There will be hopes Amazon’s arrival could reduce the financial pressure, and perhaps precipitate a sale of Grubhub to the e-commerce titan.
The deal came as the FTSE 100 jumped 1.2pc, or 82.3, to 7107.77 while the mid- cap FTSE 250 gained 1.5pc, or 279.17, to 18,594.48. Some of the biggest risers in the blue-chips were those hardest hit by the recent bout of selling. Scottish Mortgage Investment Trust, which has large stakes in firms such as Tesla and Amazon, climbed 6.9pc, or 49.8p, to 776p after a sharp decline following a previous sell-off in global technology stocks.
Retailers – under pressure as the cost of living escalates – regained lost ground, with JD Sports up 4.6pc, or 5.2p, to 118.35p, Next 0.4pc, or 22p, to 6138p and Burberry 3.1pc, or 49.5p, to 1629.5p.
Major miners were also on the rise, having been hit by fears that a global recession will dent demand for commodities. Anglo American jumped 0.9pc, or 24p, to 2629p, Rio Tinto climbed 1pc, or 46.5p, to 4687.5p and Antofagasta bounced 2pc ,or 20.5p, to 1040p.
Despite rising earlier in the session, oil companies ended in the red as Brent crude dropped to $100 a barrel amid fears a global economic slowdown will dent demand. Shell was down 2.1pc, or 41.8p, to 1974.2p and BP by 1.3pc, or 4.65p, to 368.65p.
Hargreaves Lansdown analyst Susannah Streeter warned the wider mood was ‘likely to be cautious’ as worries persisted about the impact of weakening consumer and business confidence in the economy.
Elsewhere, van hire group Redde Northgate hiked its full-year dividend to 21p from 15.4p per share after nearly doubling profits.
The FTSE 250 firm reported a pre-tax profit of nearly £133m for the year to the end of April, up 98pc year- on- year, as it highlighted a recovery from the pandemic and ‘ strong’ demand. Despite this, the shares were down 0.5pc or 1.5p, at 334p.
Recruitment group Robert Walters rose 0.2pc, or 1p, to 510p after a record quarter. It reported net fee income, a key profit measure, of £112m in the three months to June 30, a 26pc rise year-on-year as job markets continued to run hot across the world.
Finally, asset manager Abrdn rose 5.1pc, or 7.6p, to 156.55p after launching a £300m share buyback. The first phase, worth up to £150m, has begun. It is due to end no later than December 30.