Just Eat Takeaway: iFood sale will whet appetite for Grubhub disposal

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Just Eat Takeaway argues supply is the factor it does greatest. Shareholders within the on-line meal supply group could disagree. They have stomached losses of just about 80 per cent over the previous 12 months. Better victuals arrived on Friday, when Just Eat mentioned it might promote its one-third stake in Brazilian enterprise iFood for as much as €1.8bn.

Tech traders as soon as thought on-line meal supply corporations had a brilliantly disruptive enterprise mannequin. Harsh actuality has proven that prices are excessive, boundaries to entry are low and markets are localised.

As a consolidator, Netherlands-based Just Eat hoped to treatment these flaws with economies of scale. Investors, like all homebody saved ready for hours for a pizza, have been getting impatient with the lossmaking group.

Tech conglomerate Prosus will pay €1.5bn in money and as much as €300mn for iFood shares it doesn’t already personal. A a number of of 0.5 instances enterprise worth to subsequent 12 months’s gross transaction worth is greater than twice Just Eat’s valuation, thinks Numis. Just Eat shares jumped nearly two-fifths.

This appetiser will maintain shareholders glad for now. They will quickly get hungry for the primary course, the sale of Grubhub. Just Eat purchased its US rival for $7.3bn in shares in 2021. In April, it mentioned the unit was for sale. Earlier this month, it wrote down Grubhub’s worth by €3bn.

Just Eat leads the market for meals supply within the UK, Germany, Italy and Canada. But orders in North America have been down a tenth within the first half of this 12 months. US rival DoorDash continues to develop at sturdy double digits. Rising inflation is squeezing shopper wallets and rising debt prices.

About €550mn of debt funds fall due at the beginning of 2024. Pressure from that liquidity crunch has diminished. The iFood sale boosts money available to €2.3bn. That is sufficient for nearly two years at the newest six-month burn fee of €450mn, even after debt repayments.

A Grubhub deal comes subsequent. But most traders who tapped their ft to TV advertisements fronted by rapper-for-hire Snoop Dogg tuned out way back.

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