How Much Can Uber Actually Pay for Grubhub?
Grubhub's (NYSE: GRUB) stock recently popped after Uber (NYSE: UBER) reportedly approached the food delivery company with a buyout offer. The Wall Street Journal claims Uber is offering 1.9 shares of its own stock for each Grubhub share. At the end of the trading day on May 19, 1.9 shares of Uber were worth $63.46, which only represented a 10% premium to Grubhub's price of $57.43.
Grubhub's stock was trading in the mid-$40s before the news broke on May 12. Grubhub reportedly rejected Uber's initial offer, and the Journal claims Uber could raise its offer to 1.925 shares -- which would likely fall short of Grubhub's rumored demand for 2.15 shares.
A merger between Grubhub and Uber Eats, which both trail behind DoorDash in the U.S. food delivery market, makes strategic sense -- but how much higher can Uber possibly raise its offer?
Source Fool.com
