Grubhub Is Said Near Deal With Just Eat

Grubhub is reportedly close to combining with Just Eat of the Netherlands, dropping its plans to be acquired by Uber.
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Grubhub  (GRUB) - Get Report is reportedly close to combining with Just Eat, dropping its plans to be acquired by Uber  (UBER) - Get Report because of antitrust concerns.

Grubhub and Just Eat, food-delivery specialists based respectively in Chicago and the Netherlands, are negotiating an all-stock deal, The Wall Street Journal reported.

That deal could be reached as early as today, the Journal reported.

In a statement, the management board of Just Eat “confirms that it is in advanced discussions with Grubhub regarding an all-share combination of Just Eat with Grubhub."

Last month, reports said that Grubhub was in talks with Uber, the San Francisco ride-hailing and food-delivery company. 

But several Democratic senators expressed concern about the combination, which would put rival DoorDash at a disadvantage.

Sens. Amy Klobuchar of Minnesota, Richard Blumenthal of Connecticut, Patrick Leahy of Vermont and Cory Booker of New Jersey last month urged antitrust regulators to investigate the Grubhub-Uber transaction if it occurred.

Uber's board is set to meet today and could end the talks with Grubhub, the Journal reported.

At the same time the paper reported that investors and others have no assurances that Uber's board will end the talks and that Grubhub and Just Eat will come to terms on a deal.

Late in May, Bloomberg reported that Grubhub was asking Uber to pay a breakup fee if the government blocked their tieup. Uber wasn’t too keen on that idea.

And the two sides disagreed about price. Uber was willing to pay Grubhub holders 1.9 of its shares for each of their shares, sources told the Journal. Grubhub was seeking 2.15 Uber shares per Grubhub share.

Grubhub had received merger interest from two European companies: Just Eat and Germany’s Delivery Hero, CNBC reported.

The food-delivery market has proved a tough nut to crack, as competition is intense and profit margins are thin. The industry has also come under fire from restaurateurs, who say that the services' fees are so high as to render many of the meal orders unprofitable for the restaurants.

Uber shares recently traded at $34.80, down 4.9%. They have climbed 24% over the last three months.

Grubhub stock recently traded at $56, down 3.3%. The stock has risen 16% over the past three months.