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By Toby Sterling
AMSTERDAM (Reuters) -Europe's biggest meal delivery company Just Eat Takeaway.com is looking at selling U.S. arm Grubhub less than a year after buying it, under pressure from investors to revive its shares amid stiff competition and a fading pandemic boost.
In an abrupt turnaround, CEO Jitse Groen said Takeaway had hired banks to explore a possible sale of Grubhub - alongside potential partnership options it was already exploring - and that buyers had expressed more than casual interest.
"We are in talks with people around this (a sale), but I need to caution that doesn't automatically lead to a transaction," Groen told reporters.
Takeaway, which paid $7.3 billion for Grubhub in 2021 while racking up a billion-euro loss, has been hit as investors reappraise valuations for loss-making technology companies and stocks seen as big beneficiaries of the pandemic.
The company's shares, which have lost two-thirds of their value since an October 2020 peak above 100 euros, rose strongly in early trading but were up just 0.8% at 26.31 euros at 1426 GMT, not far above their 2016 IPO price of 23 euros.
At current levels, Takeaway's market value of 5.3 billion euros ($5.8 billion) is less than it paid for Grubhub.
CFRA Research analyst Angelo Zino said Grubhub's value was now likely much lower than during the pandemic, "as revenue remains above pre-pandemic levels but growth has stalled."
Competitors that might be interested in buying Grubhub, Doordash and Uber Eats, would likely face opposition from U.S. antitrust authorities, he said.
Investor sentiment towards online food companies has soured amid expectation that some customers who switched to home deliveries during the pandemic will return to restaurants.
In a trading update, Takeaway said orders had fallen 1% in the first quarter and it now expected "mid-single digit growth" in Gross Transaction Value (GTV) this year, instead of the "mid teens" predicted in January.
GTV measures the total value of food ordered and delivered.
Takeaway handled 264.1 million orders in the first quarter, compared with an estimate of 286 million by JPMorgan analysts.
CATALYSTS
The downgrade to Takeaway's outlook follows a warning by British rival Deliveroo last week that consumer spending could slow this year amid a cost-of-living squeeze.
Takeaway and Deliveroo have been striking deals with supermarkets to add on-demand grocery delivery to their offerings to try to stave off competition from "fast grocery" startups such as Gorillas of Germany and Getir of Turkey.