Just Eat Takeaway Shares Rise

Just Takeaway (AS:TKWY) shares jumped more than 17% on Wednesday after the online delivery service announced a new partnership with Amazon (NASDAQ:AMZN) that will give it a stake in the tech giant's Grubhub unit.

The deal, which will be renewed annually, allows Amazon Prime members in the US to get a free one-year subscription to the Just Eat Takeaway, Grubhub+ offer. In return, Amazon will receive warrants for more than 2% of Grubhub's fully diluted common equity, with a further 13% depending on Grubhub's future performance. Just Eat said the deal will not have an impact on Chicago-based Grubhub's financial performance this year, but will contribute to the unit's earnings and cash flow in 2023. However, Just Eat added that it would continue to work with its advisors to explore a "partial or full sale" of Grubhub. The group has reportedly received interest from a number of suitors, including private equity firm Apollo Global Management. "There can be no certainty that any agreement will be reached with other parties in relation to Grubhub, nor can there be any certainty as to the timing or terms of any such agreements," Just Eat said in a statement. Just Eat added that Grubhub had gross assets of €6.5 billion at the end of 2021 and an annual pre-tax loss of €403 million. Wednesday's deal with Amazon comes as Just Eat faces shareholder pressure to sell Grubhub, the delivery company it acquired last year for $5.8 billion. Just Eat's slowdown in annual customer spending and warnings of intense competition from rivals such as Deliveroo (OTC:DROOF) and Uber (NYSE:UBER) have raised investor concerns about the group's future profitability. Just Eat said in April that it would take a year to turn a profit. Meanwhile, aggressive central rate hikes aimed at curbing the recent rise in inflation have undermined assumptions of cheap capital costs that supported Just Eat's valuation. The company's shares have lost more than 80% of their value over a one-year period.   Source: Investing.com