In this illustration photo, Uber and Grubhub logos are displayed on mobile phone screens in Ankara, Turkey on May 19, 2020.
Hakan Nural | Anadolu Agency | Getty Images
Uber representatives are confused with Grubhub’s decision to merge with Just Eat Takeaway, citing a higher offer price and frustration over disagreements about how to characterize regulatory risks, according to people familiar with the matter.
Uber plans to put out a statement after Grubhub announces its deal with Just Eat Takeaway, a European food delivery service that entered the sale process relatively late. The deal closed Wednesday, said the people, who asked not to be named because the negotiations are private.
Uber offered 1.925 shares for each Grubhub share, valuing Grubhub at a volume weighted average price of about $70 per share, according to three of the people. Uber’s offer valued Grubhub at a higher price than Just Eat’s all stock offer, the people said.
Spokespeople at Uber and Just Eat declined to comment. A spokesperson at Grubhub couldn’t immediately be reached for comment.
Grubhub chose Just Eat’s proposal because of more regulatory certainty, two of the people said. Uber was still negotiating antitrust and regulatory issues with Grubhub this week and had grown increasingly concerned with deal leaks and a New York Times story published on Tuesday detailing predatory fee practices from Grubhub, one of the people said.
Uber felt its stock has more upside than shares of Just Eat, making it better currency for Grubhub shareholders, said two of the people. Just Eat plummeted more than 10 percent on the news a deal for Grubhub was imminent.
Grubhub felt increasing political pressure from several Democratic lawmakers who expressed concerns over a deal wit Uber, which would create a new market leader in the U.S. online delivery space over rival DoorDash. In a letter to top antitrust officials last month, Sens. Amy Klobuchar, D-Minn., Richard Blumenthal, D-Conn., Patrick Leahy, D-Vt., and Cory Booker, D-N.J., urged the agencies to investigate the deal if it closed.
In a statement, Klobuchar said, “I have repeatedly raised concerns and advocated against a potential merger between Uber and GrubHub. During this pandemic, when millions are out of work and many small businesses are struggling to stay afloat, our country does not need another merger that could squelch competition. News that the Uber/Grubhub deal may not materialize would be good for both consumers and restaurants.”
Grubhub’s deal with Just Eat is unlikely to garner as much regulatory attention as its possible combination with Uber. The proposed Uber-Grubhub deal would have combined two of the three largest food delivery companies in the U.S.
The British competition authority just gave the green light in April for Britain’s Just Eat and Netherlands-based Takeaway to combine. At the time, the British Competition and Markets Authority said it was unlikely Takeaway would have been able to re-enter the British market in a significant way on its own without the merger.
Watch: Uber likely to pull out of merger talks with Grubhub over antitrust concerns