Netherlands-based delivery company Just Eat is thinking about selling Grubhub, nearly two years after first announcing its $7.3 billion acquisition. 

Management is working with advisers to potentially introduce a strategic partner into the Grubhub business and/or the partial or full sale of the third-party delivery company, according to a trading update posted by Just Eat. 

“There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be,” the company said in a financial filing. “Further announcements will be made as and when appropriate.”

The company’s North America business, which includes Grubhub, gathered roughly 90 million orders in Q1, down from nearly 95 million in 2021. Overall, Just Eat took in 264.1 million orders in the quarter, a decline from about 267 million in the year-ago period. The company’s other segments include Northern Europe, the U.K. and Ireland, and Southern Europe and Australia/New Zealand.

In October, investor Cat Rock Capital Management, which owns about 6.5 percent of Just Eat, urged the company to sell or spinoff Grubhub by the end of 2021 to “refocus [Just Eat’s] business and address the deep and damaging undervaluation of the Company’s equity.”

“Fortunately, [Just Eat] management has an obvious and actionable lever to quickly solve its valuation problem and refocus its business—selling or spinning-off Grubhub,” Alex Captain, founder and managing partner of Cat Rock Capital, said in an open letter at the time. “[Just Eat’s] stock appreciated +329 percent from its 2016 IPO to the day before the Grubhub acquisition announcement in June 2020, dramatically outperforming the market. Since announcing the Grubhub purchase just 16 months ago, [Just Eat] stock has underperformed the MSCI World Index by a remarkable 69 percent.” 

Cat Rock Capital suggested Grubhub’s same-day logistics network would be of better value to a range of U.S.-based e-commerce and physical retailers, including, Walmart, Target/Shipt, Instacart, and Kroger.

In response, Just Eat acknowledged Grubhub has challenges, but described the third-party aggregator as a “large and growing business with good underlying profitability.” The company claimed it had a clear improvement plan to refocus Grubhub and that it was excited by the brand’s potential. 

The multi-billion merger between Grubhub and Just Eat was first revealed in June 2020 after Grubhub and Uber’s negotiations fell through. A month later, Uber shifted gears and announced its intention to purchase Postmates for $2.65 billion. 

When the transaction between Grubhub and Just Eat finalized in June 2021, the combined entity became the world’s largest online food delivery company outside China. 

Just Eat is the result of an $11.1 billion merger between U.K.-based Just Eat and Netherlands-based in 2020.

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