Just Eat’s Brazil drop-off is first of many

LONDON, Aug 19 (Reuters Breakingviews) - Just Eat Takeaway (TKWY.AS) is facing a new reality in food delivery. A year ago, Chief Executive Jitse Groen rejected a 2.3 billion euro offer for its 33% stake in Brazilian food delivery startup iFood, claiming it undervalued the business. However, on Friday, the 4.6 billion euro business agreed to sell the stake for around 1.8 billion euros to $133 billion Amsterdam-listed Prosus (PRX.AS).

The knock-down price, however, is a relief to investors. On Friday, shares in Just Eat soared nearly 30%, as the valuation is likely to have been better than many had expected. At 1.8 billion euros, Prosus’s offer values the stake at nearly 5 times iFood’s expected revenue in 2022, according to a Breakingviews estimate. That’s a hefty premium to the average 1 times Just Eat Takeaway and its European rivals, Delivery Hero (DHER.DE) and Deliveroo (ROO.L), are currently valued on. With inflation soaring and punters expected to cut out unnecessary spending, Groen may want to accelerate a plan to flog its U.S. division Grubhub. (By Karen Kwok)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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