Uber may pay a 25% premium for Grubhub in a takeover, Barclays says
- Grubhub may fetch as much as $75 per share in an Uber takeover, according to a Wednesday note from Barclays.
- That's a roughly 25% premium from where shares of the food delivery company traded at Tuesday's close.
- "UBER potentially doing this before the industry acceleration is priced into GRUB shares (and before UBER's ride-hail business recovers) is opportunistic, in our view," a group of analysts led by Deepak Mathivanan wrote.
- Still, a deal might not come to fruition. On Wednesday, CNBC's David Faber reported that Uber rejected Grubhub's all-stock proposal, as the two companies remained at odds over price.
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Grubhub could get as much as $75 per share in an Uber takeover, according to a Wednesday note from Barclays.
That's a roughly 25% premium from where shares of the food-delivery platform traded at Tuesday's close. Grubhub gained 29% to $60.39 per share Tuesday following reports that Uber made an offer for the company.
"In addition to meaningful upside, we note that this deal allows GRUB shareholders to participate in what we think could be a strong ride-hail industry recovery in 2020-2021," a group of analysts led by Deepak Mathivanan wrote.
Still, a deal might not come to fruition. On Wednesday, CNBC's David Faber reported that Uber rejected Grubhub's all-stock proposal, as the two companies remain at odds over price. Shares of Grubhub fell more than 7% during intraday trading Wednesday.
A merger between Uber and Grubhub makes sense, the Barclays analysts said, citing "the meaningful opportunity for both revenue and cost synergies."
If Uber does pay $75 per share, the total transaction would be about $7.2 billion, according to the note. Barclays raised its Grubhub price target to $79 from $55.
The firm kept its Uber price target flat at $36, but noted that if a deal were formally announced it could see shares of the ride-hailing company reach its upside valuation of $43 per share.
Mathivanan continued: "UBER potentially doing this before the industry acceleration is priced into GRUB shares (and before UBER's ride-hail business recovers) is opportunistic, in our view."
Grubhub has gained 24% year-to-date through Tuesday's close.
