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Uber Technologies Inc. and Grubhub Inc. are discussing a takeover valuing Grubhub at roughly $6 billion and estimating a big cost savings that would help pay for the deal, according to people familiar with the matter.
The companies, which both offer third party delivery services, are considering a deal that would value Grubhub stock at around 1.9 Uber shares, or just over $60 for each Grubhub share based on trading Wednesday afternoon, the people said.
Grubhub had been seeking 2.15 Uber shares in the negotiations, The Wall Street Journal reported Tuesday, but Uber balked at paying that much. The potential price has jumped around since the latest discussions began in February and may continue to do so assuming the talks continue.
Grubhub shares soared 29 percent Tuesday, after the merger was reported, and it closed at $60.39. They dropped to $57.15 by Wednesday afternoon amid a broader market selloff. Uber stock is little changed and currently trades at around $31.94.
Uber and Grubhub officials see opportunities in the rapidly changing third-party delivery services. Meal-delivery companies have been scrambling to respond to increased demand as the coronavirus pandemic confines people to their homes and increases the cost of delivering food safely.