Shares of Yelp gained more than 27% to $8.52, while GrubHub rose 5% to $50.70.
Alongside the sale of Eat24, the companies also announced a partnership in which Yelp will integrate GrubHub's food ordering platform into its offerings. The moves could help both companies as they face competition in food delivery from Amazon.com Inc. (AMZN) and Uber Technologies Inc.
Yelp Co-founder and CEO Jeremy Stoppelman said the deal and the partnership would expand ordering and delivery options. The deal also provides Yelp with a financial return, as the sale price more than doubles the $134 million in cash and stock that Yelp paid for Eat24 in 2015. JMP analyst Ronald Josey wrote in a report that the deal would significantly improve the restaurant ordering experience on Yelp's site and app.
Yelp also said late Thursday that it earned 9 cents per basic share in the second quarter, topping forecasts, and announced a $200 million stock buyback.
GrubHub announced a similar deal with Groupon Inc. (GRPN) on Monday. Chicago-based GrubHub is buying assets of Groupon's OrderUp delivery service in 27 markets for an undisclosed sum, and will provide delivery services for the online deal promoting company. Groupon bought OrderUp for a reported $69 million in 2015.
The food delivery business has drawn well-capitalized competitors such as Amazon Restaurants and UberEats.
The Yelp deal will consolidate GrubHub's market share in big foodie havens such as New York and San Francisco, KeyBanc Capital Markets analyst Brad Erickson wrote in a report.
Additionally, Groupon reported earnings of 26 cents per share in the second quarter after the close Thursday, in-line with forecasts. Revenues increased by 32% to $158.8 million, slightly above Wall Street expectations.