Just East Takeaway (TKAYF) shares surged higher in Amsterdam trading Wednesday after the struggling meal delivery group said retail giant Amazon (AMZN) has purchased warrants that could give it a 2% stake in its U.S. division known as Grubhub.
The deal allows Just Eat, which purchased Grubhub last year in an all-share deal worth $5.8 billion, to sell another 13% stake to Amazon if their newly-unveiled promotion -- which includes free delivery for orders over $12 in the 4,000 cities that Grubhub operates -- attracts enough customers for the online retailer. The warrants purchased by Amazon would convert into a 2% stake if exercised.
"I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants," said Grubhub CEO Adam DeWitt. "Amazon has redefined convenience with Prime and we're confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers."
Just Eat Takeaway shares closed 16.1% higher in Amsterdam at €15.94 each, while Amazon shares edged 0.33% higher to $113.75 each.
Uber Technologies (UBER) shares were marked 4.17% lower at $21.58 while DoorDash (DASH) fell 9.05% to $68.12 each following news of the Amazon stake in Grubhub, as investors pared bets on market share gains for the meal delivery leaders.
Uber said its Delivery division, which includes market leader Uber Eats, saw revenues rise 4% over the three months ending in March to $2.5 billion, while DoorDash posted stronger-than-expected first quarter revenues of $1.5 billion, a 35% increase from last year.
