Just Eat Takeaway is investigating a sale of Grubhub barely a year after buying the company

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The Grubhub logo displayed on a smartphone screen.

Rafael Henrique | Sopa images | Light rocket | Getty Images

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

The board of Just Eat Takeaway.com “reaffirms its alignment with shareholders by looking to both create and realize value from the company’s highly attractive asset portfolio,” the company said in a trading update Wednesday.

“As such, management, along with its advisors, is currently actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub.”

Just Eat Takeaway.com said it cannot guarantee that such a sale will be agreed, or when it could happen. “Further announcements will be made as and when needed,” it said.

The company is increasingly faced with calls from leading shareholders to divest its Grubhub division. Just Eat Takeaway.com completed its acquisition of the American food-ordering platform barely a year ago, after it led Uber and Germany’s Delivery Hero to a deal after a heated takeover battle.

In October, activist investor Cat Rock Capital called on Just Eat Takeaway.com to sell Grubhub and “refocus its operations 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 stock price has been “depressed”, making the company “vulnerable to takeover bids well below its long-term NAV”.

Just Eat Takeaway.com shares rose about 3% on news of the company’s interest in the sale of Grubhub. The company has lost more than two-thirds of its market value in the past 12 months.

It’s not the only delivery company that’s been struggling in the stock market lately. Delivery Hero is down 73% in the past year, while UK Deliveroo is down 56%.

Consumer habits are changing after two years of intermittent pandemic shutdowns, with demand for online food delivery, streaming services and home fitness equipment dwindling.

Netflix on Tuesday reported a decline in its first quarter subscriber base, 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 euros ($7.8 billion) in the first quarter, up 4% from the same period a year ago.

But it has also revised its forecast for 2022 downwards, with GTV expected to grow at “one-digit average annual rate” – previously it was “the mid-teens.” The company said growth in the second quarter of the year will “remain a challenge”.

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

“Our priority for 2022 is to improve profitability and strengthen our business,” Groen said in a statement.



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