The highly competitive industry looks primed for consolidation as players battle for market share
Thursday 28 Feb 2019 Author: Lisa-Marie Janes

Online delivery platform Just Eat (JE.) could be a takeover target for rival Uber Eats as the latter tries to boost market share, says Liberum analyst Ian Whittaker.

Shares in Just Eat fell by nearly 7% on 21 February after Uber Eats revealed it was cutting fees paid by restaurants from 35% to 30% of the order value and that it would target firms which want to deliver themselves.

Whittaker argues the move implies that Uber Eats’ business model is not working, increasing the likelihood of a potential bid for Just Eat.

Just Eat is enjoying strong growth in Canada, which is a key strategic target for its rival, and has a lock on the market in smaller towns, which Uber Eats would struggle to challenge.

‘We cannot see restaurants switching out of Just Eat into Uber Eats – the risk would be too great that the restaurant would lose customer orders,’ comments Whittaker.

Shares in Just Eat have fallen by 17% since last July as the market didn’t like investment plans and competition intensified.

The company has also been openly criticised by US shareholder Cat Rock Capital which recently demanded Just Eat start merger talks with an industry peer to make it ‘dramatically more formidable’ against rivals.

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