Just Eat bitten by Uber move

Californian taxi-hailing app Uber is reportedly in early talks to buy London-based food delivery start-up Deliveroo to expand its existing Uber Eats business.

Both Uber, valued at about $72billion, and London-based Deliveroo, founded in 2013, declined to comment.

Observers suggested Deliveroo would be reluctant to relinquish its independence, while any bid is likely to have to be pitched well above Deliveroo’s estimated $2billion valuation.

But the threat of competition heating up sent shares in Just Eat to a year-low 674p, down 34p.

The FTSE 100 company served 24 million customers with 104 million takeaways around the world in the first half of the year as it notched up pre-tax profit of £48.1million on sales of £358.4million.

Canaccord Genuity analyst Nigel Parson said: “This is potentially terrifying for Just Eat.

“A war for market share could be very damaging for markets and profits.

“Just Eat, Domino’s, Uber Eats and Deliveroo have grown very rapidly but it is too early to call them winners.

“Indeed, we believe that the battle has just begun.”

Edison Investment Research’s Paul Hickman said a combination would produce “potentially a killer brand”.

Liberum analyst Ian Whittaker was more confident about Just Eat’s ability to fight off a bulked-up rival, arguing it would be “extremely hard to dislodge” after grabbing share of about a third of the UK market.

He also pointed to Just East’s exposure to “second tier” towns, where Uber and Deliveroo are “naturally weaker than the big cities”.