Investors tucked into Just Eat as the firm mulled a possible sale of its US arm Grubhub less than two years after buying it.
Shares in the takeaway delivery group shot up 2,1 per cent or 46.5p to 2217.5p after it revealed it was ‘exploring’ a sale of Grubhub or bringing in a partner to offload a stake in the business.
However, it stressed that agreement was not guaranteed.
![On the menu: Just Eat shares shot up 2.1% after it revealed it was ‘exploring’ a sale of its US arm Grubhub or bringing in a partner to offload a stake in the business](https://i.dailymail.co.uk/1s/2022/04/20/18/56843497-0-image-m-17_1650474842940.jpg)
On the menu: Just Eat shares shot up 2.1% after it revealed it was ‘exploring’ a sale of its US arm Grubhub or bringing in a partner to offload a stake in the business
Just Eat bought Grubhub in June 2020 in a £5.8billion deal as part of a bid to break into the lucrative US market. The merger came amid booming demand for food delivery services in lockdown.
The acquisition created the largest food delivery group outside China. However, this seems set to end as the pandemic subsides.
Plans to offload Grubhub came as Just Eat reported a 1 per cent year-on-year drop in orders to 264.1million in the first quarter of 2022 as it struggled to beat its numbers from the pandemic.
However, transaction values grew 4 per cent to £6billion as the price of an average order rose. Despite this, Just Eat warned it expected growth in the second quarter of the year to ‘remain challenging’ and cut its full-year forecasts.
The group expected its transaction values to rise by mid-single digits year-on-year, down from previous estimates of growth in the ‘mid-teens’.
However, investors shrugged off the downgrade amid hopes a sale of Grubhub could boost prospects and revive its share price, which has fallen 70 per cent in 12 months.
‘Selling Grubhub could give [Just Eat] the resources to dominate in Europe,’ said AJ Bell investment director Russ Mould.
However, he warned that the value of any deal would be closely watched as anything lower than Grubhub’s purchase price ‘could embarrass current management’.
‘If this is the right decision for the business then it seems logical for Just Eat to press ahead with a sale,’ Mould added.
The FTSE 100 inched up 0.4 per cent or 27.94 points at 7629.22 while the FTSE 250 climbed 0.6 per cent or 121.83 points to 21084.
Banking stocks helped keep the blue-chip index in positive territory as predictions of higher interest rates sent yields on UK government bonds higher.
Lloyds climbed 2.1 per cent or 0.96p to 46.33p while Barclays gained 2.2 per cent or 3.18p to 148.88p, NatWest rose 2.5 per cent or 5.5p to 225.9p, HSBC added 2.4 per cent or 12.4p to 538p and Standard Chartered jumped 1.2 per cent or 6.2p to 514.6p.
Miners, meanwhile, were weighing on the FTSE 100 following a bleak update from Rio Tinto (down 4.7 per cent or 292p at 5850p).
Anglo American slumped 2.9 per cent or 119.5p to 4033.5p while Glencore dropped 3.1 per cent or 16.7p to 518.9p, Fresnillo fell 1.6 per cent or 13p to 783p, BHP lost 2.9 per cent or 86.5p to 2889.5p and Antofagasta sank 3 per cent or 51p to 1636p.
Things were similarly gloomy in the FTSE 250, with gold digger Centamin tumbling 5.5 per cent or 5.32p to 92p after its gold sales fell 13 per cent in the first quarter of 2022.
Mid-cap defence firm QinetiQ climbed 1.9 per cent or 6.4p to 343.8p after upgrading its profit forecasts. The group reported that its results for the year to the end of March would be ‘marginally ahead’ of its previous guidance.
It noted ‘significant growth’ in Europe, the Middle East and Africa as well as ‘excellent’ performances in the UK and Australia.
Transport firm FirstGroup announced that former BT executive Graham Sutherland had been appointed as its new chief executive with effect from May 16. Shares in the company rose 0.1 per cent or 0.1p to 116p.
Oxford Biomedica slumped 14.7 per cent or 94p to 545p after forecasting a fall in sales this year as it paused manufacturing of AstraZeneca’s Covid-19 vaccine.