Just Eat Takeaway to wipe £5bn off Grubhub valuation (2024)

Just Eat Takeaway’s sale of Grubhub has been thrown into disarray as bosses prepare for a multibillion-pound writedown on the US business in what could go down as one of the tech sector’s most disastrous deals.

Bankers from Bank of America have the task of finding a buyer or strategic partner for the American food delivery operator, which Just Eat Takeaway bought for $7.3 billion (£5.8 billion) less than a year ago.

However, sources said Grubhub was being offered to potential bidders at a fraction of that amid a global tech stock sell-off — and it may not find a buyer at all.

It is the latest crisis for the takeaway giant, which has suspended a senior executive and is seeking a new chairman.

Multiple sources said expectations for the sale had been slashed to as low as £1 billion after it failed to drum up significant interest from any strategic buyers. A number of private equity firms are understood to have expressed an interest, but it is not known if there have been any serious approaches.

Just Eat Takeaway, formed from a merger of UK-listed Just Eat and Dutch rival Takeway.com, is offloading Grubhub after investors led by US activist Cat Rock Capital attacked the deal as the company struggled to compete with larger rivals UberEats and DoorDash.

Cat Rock is run by Alex Captain, who has been a vocal critic of Just Eat Takeaway’s management.

Last November, the activist, which has a 5.1 per cent stake, said there would still be benefits of the sale at a value of €3 billion including debt. However, since then, investor appetite for tech stocks has deteriorated in what some compare to the dotcom bubble bursting. Private food delivery start-ups such as Gorillas and Getir have announced job cuts.

A source said: “I’d be amazed if this does get done now because I don’t know how management can credibly stand up and go ‘you know, we’ve paid billions of dollars for this asset and now we’re going to take a massive bath on it’.”

Just Eat Takeaway, which is run by chief executive Jitse Groen, 43, has lost more than three quarters of its value on the stock market since September. The entire company is worth just £3.7 billion.

Tech companies have been battered in the past six months amid concerns about inflation and rising interest rates, driving investors away from growth stocks.

On top of that, Just Eat has had a torrid time after it received a formal complaint regarding personal misconduct by Jorg Gerbig, the chief operating officer. It said the misconduct had taken place at a corporate event, thought to be a ski trip to Switzerland this year for 5,400 staff, which cost $16 million. Gerbig is “fully co-operating” with the inquiry, and has “full confidence” in the outcome, according to Just Eat.

It suffered a shareholder revolt at its annual meeting this month after revealing falling orders. The company reported a pre-tax loss of more than €1.1 billion for 2021. In a letter to shareholders, Cat Rock called for a block on the re-election of the chief finance officer Brent Wissink.

Chairman Adriaan Nühn quit on the eve of the meeting. Sources said two senior female figures in British tech had been asked by investors about replacing him in an effort to boost the company’s image.

Just Eat Takeaway declined to comment.

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