Online takeaway company Just Eat buys rivals in Britain and Canada

Thu Dec 15, 2016 4:22am EST
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By Paul Sandle

LONDON (Reuters) - Online food delivery company Just Eat has agreed to buy rivals hungryhouse in Britain and SkipTheDishes in Canada, spending more than $300 million to strengthen its leading position in both markets.

The London-listed firm said it would pay an initial 200 million pounds ($251 million) to buy hungryhouse from Delivery Hero, a Berlin-based company backed by Rocket Internet, plus 40 million pounds based on performance.

Hungryhouse is an online food company operating solely in the Britain. Just Eat said the deal was expected to boost its earnings per share (EPS) in the first full year of ownership.

In Canada, Just Eat said it would pay an initial C$110 million ($66 million) for SkipTheDishes, a delivery service focused on lower density metropolitan and suburban areas which has 2,900 restaurants listed and 350,000 active customers.

Just Eat said it expected the deal, net of one-off exceptional costs, to moderately weigh on EPS in 2017 and 2018 before boosting earnings thereafter.

Shares in Just Eat, which listed in 2014, rose to a new high of 623.5 pence on Thursday after the deals were announced and were 2.3 percent higher at 611 pence at 0905 GMT.

Chief Executive David Buttress said the two transactions would help the company build its presence in two key markets.

He said he was confident the British deal would be approved by competition authorities, despite analysts saying the deal would bring together the first and second ranked players.   Continued...