Just Eat Takeaway’s share price rose nearly 27 per cent yesterday after it raised £1.5billion selling its one-third stake in Brazilian delivery app iFood.
The buyer, Dutch investment firm Prosus, already owns the remaining two-thirds.
Prosus’s affiliate, Movile, will pay Just Eat £1.3billion upfront while the rest hinges on how well the online food delivery sector performs over the next year.
Boost: The £1.5billion raised, Just Eat said, will bolster its balance sheet and pay down its debt
Food deliverers are in a squeeze as people tighten their belts. Just Eat, a Dutch company listed in London and Amsterdam, has lost around three-quarters of its value in a year, while rival Deliveroo has cut its annual revenue forecast.
The £1.5billion raised, Just Eat said, will bolster its balance sheet and pay down its debt.
Danni Hewson, analyst at AJ Bell, said Just Eat had missed a trick. Hewson said: ‘The value of the transaction is notably less than the £2billion turned down by the company last summer when ordering food over the internet arguably reached its zenith.’
Prosus had been in heated talks to buy the remaining third of iFood since 2020. The competition in Brazil is so tough that Uber Eats bowed out in March.
Just Eat may look to sell its US business, Grubhub, too. Hewson said: ‘It might have to swallow the sale of Grubhub at a similarly discounted price, not long after splashing out on a £6.2billion deal, as it looks to concentrate on boosting its market position in Europe.’
Just Eat has had to write down £2.6billion from the value of Grubhub because of weaker customer demand and tough economic conditions.
Competition among food delivery apps is notoriously fierce in the US and Just Eat faces immediate and longer-term challenges in Europe too.
Hewson said: ‘The company will probably have to put up prices for delivery. But will people be prepared to pay more? All the while the company is facing rising costs.’ In the first half of 2022 Just Eat orders fell 7 per cent and it lost £113m.
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