On Wednesday, when the online delivery service announced a new deal with Amazon (AMZN), which will see the digital giant take a stake in its Grubhub division, shares of Just Eat Takeaway (TKWY) jumped by more than 17%.
The offer entitles Amazon Prime subscribers in the United States to a cost-free one-year subscription to Just Eat’s Grubhub+ service. The deal is scheduled to renew each year.
The deal won’t affect Chicago-based Grubhub’s financial results this year, but it will increase the division’s earnings and cash flow in 2023.
However, Just Eat emphasised that it remained dedicated to exploring a partial or complete sale of Grubhub with its advisors. According to reports, a number of parties, including the private equity firm Apollo Global Management, have expressed interest in the group’s business.
One can not ensure that any agreement about Grubhub with any other parties will be achieved. It is also not possible for any assurance regarding the timing or details of any such arrangement.
The deal reached with Amazon on Wednesday comes amid pressure from shareholders for Just Eat to sell Grubhub, the delivery service it bought for $5.8 billion in stock last year.
Investor worries about the group’s future profitability are increasing as a result of Just Eat’s warning of a decrease in yearly consumer spending and fierce competition from competitors like Uber (UBER). Just Eat estimated that it would take a year for it to start making money.
Meanwhile, the assumptions of low capital costs backing Just Eat’s valuation have been challenged by aggressive central bank interest rate increases intended to curb a recent jump in inflation.
Grubhub, a struggling US food delivery service run by Just Eat Takeaway.com, will now be owned by Amazon (AMZN), which will also grant one year of free access to its Prime subscribers.
Within a few days, all oil and gas fields that were impacted by a strike in Norway’s petroleum industry are anticipated to resume normal operations.
Tuesday, Ben & Jerry’s filed a lawsuit against its parent company Unilever (UL) Plc, claiming that selling its Israeli business to a local licensee was against its core principles.
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