Wrong order

18 May 2020 By Richard Beales Follow @richardbeales1

Some to-and-fro over value is normal in a potential merger. But for two money-losing companies with volatile stocks, financial tweaks are a second-order issue. The more critical question about combining their meal-delivery operations is whether antitrust watchdogs would block it.

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Grubhub has told Uber Technologies that its latest offer of 1.9 of its shares for each Grubhub share is too low, according to the Wall Street Journal on May 17, citing people familiar with the matter. Uber Chief Executive Dara Khosrowshahi said he might be able increase the offer to 1.925 shares, the Journal reported. Grubhub boss Matt Maloney was last week seeking 2.15 Uber shares per Grubhub share.

Combining Uber Eats, the ride-hailing company’s fast-growing but money-losing food-delivery service with rival Grubhub, would reduce competition, which Maloney has said is undermining profitability.

U.S. Senator Amy Klobuchar on May 17 blasted the merger talks, calling any deal bad for competition and consumers. Klobuchar is a senior member of the Senate's antitrust committee, which oversees competition enforcement. On Twitter, she called on antitrust watchdogs to act before Uber controls more than half the U.S. food delivery market.

Uber will cut about 3,000 jobs in addition to the 3,700 it had announced earlier this month, Khosrowshahi told employees in an email on May 18.

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