Uber in talks to buy Deliveroo, Just East shares fall

Uber is reportedly in talks to buy Deliveroo in a £1.5 billion deal.

Bloomberg reported the news on Thursday, citing people familiar with the matter.

Following the news, shares in rival food delivery service Just Eat fell six percent to a 2018 low of 664p.

Russ Mould, investment director at stockbroker AJ Bell, said: “They say strength in numbers can be a powerful force and so it is no surprise that Just Eat’s shares have taken a big hit on speculation that Uber is going to buy Deliveroo.”

“The combination of two competitors is the last thing Just Eat wants to hear, particularly when it is already trying to play catch up on the delivery side of its business,” he added.

Last year, Deliveroo was valued at over $2 billion after raising $98 million from private investors. It is one of Europe’s best-funded start-ups.

Uber and Deliveroo have not commented on the deal, however, talks are at an early stage and could still fail due to Deliveroo’s reluctance to lose independence.

Deliveroo has said that “as a matter of policy we do not comment on rumour or speculation”.

Uber chief executive, Dara Khosrowshahi, plans to keep heavily investing in Uber Eats.

“That’s a business that at this point has such a large addressable market and is growing so fast that it makes lots of sense to invest,” he said last month.

Shares in Just Eat are currently trading down 5.20 percent at 671,20 (1357GMT).

 

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.