European food delivery giant Just Eat Takeaway.com said it’s considering a sale of Grubhub, its U.S. arm, after facing pressure from investors to explore strategic deals.
Just Eat Takeaway.com’s board “confirms its alignment with shareholders in wanting to both create and realise value from the Company’s highly attractive portfolio of assets,” the company said in a trading update Wednesday.
“As such, 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.”
Just Eat Takeaway.com said it couldn’t guarantee such a sale will be agreed, or when it might happen. “Further announcements will made as and when appropriate,” it said.
The company has faced growing calls from prominent shareholders to divest its Grubhub division. Just Eat Takeaway.com completed its acquisition of the U.S. food ordering platform barely a year ago, after pipping 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 business 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 share price has been “deeply depressed,” leaving the company “vulnerable to takeover bids well below its long-term intrinsic value.”
Just Eat Takeaway.com shares rose about 3% on news of the company’s interest in selling Grubhub. The company has lost more than two thirds of its market value in the past 12 months.
It’s not the only food delivery firm having a hard time on the stock market lately. Delivery Hero is down 73% in the last year, while Britain’s Deliveroo has fallen 56%.
Consumer habits are changing after two years of intermittent pandemic shutdowns, with demand for online food delivery, streaming services and home fitness machines on the wane.
Netflix on Tuesday reported a drop in subscribers in the first quarter, marking the first time it has lost paid users since October 2011.
Just Eat Takeaway.com reported 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 also revised down its guidance for 2022, with GTV expected to grow by “mid-single digit year-on-year” — it was previously “mid-teens.” The firm said growth in the second quarter of the year will “remain challenging.”
Jitse Groen, Just Eat Takeaway.com’s CEO, said the company expects profitability to “gradually improve throughout the year,” reaching positive adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in 2023.
“Our priority for 2022 lies in enhancing profitability and strengthening our business,” Groen said in a statement.