After acquiring Grubhub for $7.3bn last year, Just Eat Takeaway is reconsidering its purchase amid slow growth and investor pressure.
With orders dwindling as the effects of the pandemic ebb, Europe’s largest food delivery service, Just Eat Takeaway, is considering the sale of US arm Grubhub.
In a much-anticipated trading update published today (20 April), Just Eat Takeaway confirmed it is “actively exploring” the sale of the platform it acquired last year for a whopping $7.3bn, when demand for online food delivery services was sky high.
Following calls from shareholders to sell Grubhub, Just Eat Takeaway said its “management is currently, together with its advisers, actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub”.
It added that the board is in “alignment with shareholders” in wanting to create value from the company’s portfolio, and that further announcements would be made when appropriate.
Although nothing has been confirmed yet, Just Eat Takeaway CEO Jitse Groen told reporters that he has hired banks to look into a sale and has been in talks with potential buyers.
“We are in talks with people around this, but I need to caution that doesn’t automatically lead to a transaction,” he said, adding that the company is also looking at “strategic partnerships” for Grubhub in the US as an alternative to a sale.
Poor US performance
Last summer, Cat Rock Capital, one of Just Eat Takeaway’s largest shareholders, warned that the company was at risk of a hostile takeover and urged management to consider divesting assets or merging with a larger rival to keep the business profitable.
In its most recent trading update, Just Eat Takeaway reported gross transaction value of €7.2bn in the first quarter of the year, up 4pc on the same period a year ago, but its overall number of orders fell 1pc to 264.1m.
Total US orders dipped 5pc in the first quarter, while they grew 4pc in Northern Europe and stayed constant in Ireland and the UK.
“After two years of exceptional growth, we maintain the same high level of orders that were processed during the Covid-19 restrictions,” said Groen in the trading update. “Our priority for 2022 lies in enhancing profitability and strengthening our business.”
Groen expects profitability to “gradually improve throughout the year” and adjusted earnings to return to positive next year.
In terms of gross transaction value, Ireland and the UK was Just Eat Takeaway’s fastest-growing market, surging 7pc last quarter compared to the same period in 2021. In November, the company announced plans to create 160 customer service-focused jobs in Ireland and invest in a new 25,000 sq ft flagship office in Dublin.
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