Uber is in talks to acquire Chicago-based Grubhub, according to the Wall Street Journal.
Uber approached Grubhub with a takeover offer earlier this year and the two companies are continuing to discuss a possible deal, the WSJ reported, citing people familiar with the matter. The two companies are in discussions on an all-stock deal, according to the report, which noted that there's no guarantee a deal will be reached.
Combining two of the country's largest meal delivery players would come as demand for food delivery services skyrockets amid the coronavirus crisis. Grubhub’s stock was up more than 25% Tuesday morning after the news broke, while Uber's stock was up more than 6%.
The WSJ reported that Grubhub recently proposed a deal that would see its shareholders receive 2.15 Uber shares for each Grubhub share, adding that Uber is "expected to review that proposal in the coming days."
In a statement to CNBC, Grubhub did not confirm or deny the acquisition talks.
“We remain squarely focused on delivering shareholder value,” Grubhub said in the statement. “As we have consistently said, consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities. That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
Uber has a current market cap of more than $58 billion, while Grubhub's market cap is around $5.5 billion.
Uber Eats did $4.68 billion in gross bookings last quarter, according to Uber's latest earnings report, which were up more than 50% year-over-year. Uber Eats remained a bright spot for the ride-hailing giant as rides fell 5% from a year ago.
“The big opportunity we thought Eats was just got bigger,” CEO Dara Khosrowshahi said at the time.
Grubhub posted revenues of $363 million last quarter, which was a 12% increase from the same time last year.
Reports circulated in January that Grubhub was considering a sale, which the company said were not true. "We felt it was important to clarify that there is unequivocally no process in place to sell the company and there are currently no plans to do so,” a Grubhub spokesperson said at the time.
