Grubhub Jumps on Deal Inquiries From Just Eat, Delivery Hero

(Bloomberg) — Grubhub Inc. shares jumped after news that Europe’s Delivery Hero SE and Just Eat Plc expressed interest in exploring a deal.

Uber Technologies Inc. has also been in talks with Grubhub about an acquisition, Bloomberg reported last month. CNBC reported Friday on interest from the other two companies, and Grubhub’s stock jumped more than 7%.

Although the European companies have made inquiries, the talks with Uber are far more advanced, two people familiar with the matter said. Spokespeople for Delivery Hero and Just Eat declined to comment, and a spokesperson for Grubhub didn’t immediately respond to a request for comment.

Food delivery has surged during the pandemic as health and government restrictions have kept many restaurants closed and people at home. However, the food delivery apps are still struggling to turn a profit. Companies compete to attract customers and restaurants by offering discounts to win market share, similar to the dynamic that once defined the ride-hailing business.

The potential deal between Uber and Grubhub quickly drew scrutiny from Washington officials concerned about the fees such companies charge restaurants and their treatment of delivery drivers. The discussions between the two companies have since turned to the prospects of a breakup fee if the deal is unable to go through.

Uber, which has seen its ride-hailing business crater during the pandemic, has made growth of its food delivery unit a central focus. Dara Khosrowshahi, the chief executive officer, said this week that Uber plans to use deals to become a leader in priority markets.

(Updates with additional reporting in the third paragraph.)

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