Uber made an offer to buy food delivery company Grubhub, according to a person familiar with the matter.
Grubhub‘s stock skyrocketed as much as 37% Tuesday following an initial Bloomberg report that Uber approached the company with a takeover offer. Grubhub’s stock was halted for a few minutes due to volatility before resuming trading. It was then halted a second and third time due to more volatility. The stock was halted yet again around 1 p.m. Eastern, ahead of a statement from Grubhub, and resumed trading up about 33%.
In the statement, Grubhub did not confirm Uber’s offer, but said it would continue looking at “value-enhancing opportunities” and that consolidation “makes sense” in the food delivery industry.
“We remain squarely focused on delivering shareholder value,” Grubhub said in the statement. “As we have consistently said, consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities. That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
Uber declined to comment.
It’s unclear how much Uber offered to buy Grubhub. Grubhub’s market cap was about $5.4 billion following Tuesday’s jump in share price. Uber’s stock was up 6% Tuesday, bringing its market cap to about $58.7 billion.
Earlier this year, Grubhub issued a statement denying it was for sale, following reports that it was an acquisition target from a few grocery companies, including Walmart. The company said at the time that “there is unequivocally no process in place to sell the company and there are currently no plans to do so.”
Uber has a rapidly growing delivery business, called Uber Eats, and it was the one bright spot in the company’s last earnings report as its core ride sharing business fell drastically due to the coronavirus pandemic. However, Uber Eats’ growth was not enough to offset the downturn in Uber’s rides business, and the company posted a whopping net loss of $2.9 billion for the first quarter of 2020.
Uber announced last week that it would lay off 3,700 employees, or about 14% of its workforce, due to the downturn in its business caused by the pandemic.
If Uber and Grubhub merge, it would join two of the largest food delivery companies into one. Other food delivery rivals include DoorDash and Postmates. Uber previously held merger talks with DoorDash, but the talks went nowhere, according to a person familiar with the matter.
Last week, Uber led a $170 million investment in scooter company Lime, which resulted in an integration of the two companies’ products. As part of the deal, Uber handed over its own scooter and bike business, called Jump, to Lime. The Lime and Uber apps will eventually integrate.
–CNBC’s Deirdre Bosa contributed to this report.
