Less than a year after its acquisition by Just Eat Takeaway, third-party delivery provider Grubhub could soon be on the market again.
Amsterdam-based JET said in a trading update Wednesday that it is “exploring the introduction of a strategic partner into and/or the partial or full sale” of the Chicago-based company.
JET CEO Jitse Groen said during a call with analysts Wednesday that the company is in active discussions with another party about Grubhub.
“I'm not going to tell you, obviously, with whom and what the intent of the exercise is that we have active discussions,” he said, according to a transcript on financial services site Sentieo.
The move comes as JET’s North American order volumes, which include Grubhub, shrunk 5% year over year in the first quarter. Gross transaction value also fell 5% on a constant currency basis.
Activist investor Cat Rock Capital has been urging JET to sell Grubhub since October, arguing that the acquisition has hurt JET’s value. JET acquired Grubhub in June 2021 for $7.3 billion, and its stock price has fallen nearly 70% since then.
“The Management 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 Wednesday in announcing the news, adding that “there can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be.”
Once the largest delivery provider in the U.S., Grubhub has fallen behind its competitors in recent years. It lost a lot of ground during the pandemic in particular, as Uber Eats and DoorDash quickly evolved to offer more than just restaurant delivery.
Grubhub has said it’s also been hurt by its outsized presence in big cities at a time when much of delivery’s growth was happening in the suburbs. It’s also been more impacted by delivery fee caps in urban centers like New York and Chicago. Yet JET’s strategy since buying the company has been to double down on those strongholds.
“As we know, Grubhub has lost market share in parts of the U.S., which is something that we don't like,” Groen said. “We do see encouraging signals in city centers. … And we're also still working quite actively on trying to remove the fee caps in the U.S. I think that's all I can say about that.”
In its push to get JET to sell Grubhub, Cat Rock has emphasized Grubhub’s value. It highlighted its $10 billion in annual gross merchandise value and strong logistics network. But it said JET should sell the delivery provider to an online grocery business like Amazon, Walmart or Instacart to create a combined service that could compete with Uber Eats and DoorDash, allowing JET to focus on its European delivery business.
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