Grubhub stock soared more than 35% on Tuesday after reports that Uber has made an offer to buy the meal delivery company.
The ride-hailing giant reportedly approached Grubhub (GRUB) earlier this year with an acquisition offer and the companies are still discussing a potential deal, according to The Wall Street Journal, citing sources familiar with the matter. Bloomberg reported a deal could be reached as soon as this month.
An Uber (UBER) spokesperson said the company does not comment on merger and acquisition rumors or speculation.
GrubHub halted its stock Tuesday afternoon to issue a statement on the reports.
“While our policy remains to not comment on specific market rumors, we want to reiterate our views with respect to M&A-related matters given the current level of recent speculation,” the company said.
“We remain squarely focused on delivering shareholder value. 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,” the statement continued. “That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
The deal would merge two major food delivery platforms amid skyrocketing demand for such services during the coronavirus pandemic. Uber’s meal delivery service, Uber Eats, has been viewed as a bright spot for the company at a time when demand for its core ride-hailing business has slowed as people have increasingly stayed home.
“There is a silver lining to this unbelievably tragic COVID virus, which is the business that we have of Eats and the category in general, just looks like it is going to be substantially increased and some would say by multiples,” said Uber CEO Dara Khosrowshahi on an earnings call with investors last week.
Grubhub was founded in 2004 and helped popularize the concept of meal deliveries. In recent years, however, the company faced fierce competition in the market from the likes of Uber, DoorDash and Postmates, each of which were well funded. Uber, in particular, was not afraid to lose billions in capital to expand into new markets and categories.
Uber stock was up 8% in midday trading Tuesday following the reports.