Amazon takes a 2% stake in Grubhub
Amazon will take a 2% stake in Grubhub, as part of a wider agreement between the e-commerce giant and the U.S. online food delivery company.
Why it matters: The move calls into question the fate of Grubhub's sale and comes as other notable retail processes were recently shelved (Kohl’s, Walgreen’s U.K. pharmacy chain) due to deteriorating market conditions and more expensive financing.
Driving the news: Grubhub has partnered with Amazon ahead of its two-day Prime Day sale, giving U.S. Prime members a free Grubhub+ membership for a year.
Details: Amazon’s 2% stake could climb up to 15%, thanks to warrants if a certain number of new customers sign up.
Context: Grubhub was put on the auction block by owner Just Eat Takeaway.com in April, less than a year after the Amsterdam-based company bought it for $7.3 billion.
- While the pandemic helped usher in a rush of customers, Just Eat is seeing a growth slowdown and exposure to the dive in technology stocks’ values.
- Just Eat shareholders have also been more critical of management.
The latest: Last month, Grubhub was reported to have attracted some early interest from private equity suitors like Apollo Global Management that have billions of dollars in dry powder on tap.
- Still, the offers were said to be around $1 billion, well below the price paid by Just Eat.