Shares in Just Eat (LON:JE) have fallen deep into the red in today’s session, following a Bloomberg report that Uber was in early talks to buy rival Deliveroo. The move would mark a blow for the FTSE 100 food delivery company, which made a pre-tax loss last year.
As of 12:36 BST, Just Eat’s share price had given up 5.34 percent to 670.20p, significantly underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.81 percent higher at 7,427.36 points. The group’s shares have lost about 2.3 percent of their value over the past year, as compared with about a 2.3-percent gain in the Footsie.
Just Eat shares under pressure
Just Eat has come under pressure today following a Bloomberg report that Uber was in talks to buy Deliveroo for several billion dollars.
“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,” said Russ Mould, investment director at stockbroker AJ Bell, as quoted by the Guardian, adding that the combination of two competitors was “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”.
Edward Park, investment director at Brooks Macdonald, meanwhile told Reuters that “Uber’s deep pockets combined with an acquisition puts a lot of competitive pressure on the other food delivery companies over the medium term”.
Analyst ratings update
Liberum Capital and Peel Hunt both reaffirmed Just Eat as a ‘buy’ today, without specifying a price target on the shares. According to MarketBeat, the blue-chip food delivery service currently has a consensus ‘buy’ rating and an average price target of 878.24p.