Following a report by Uber Technologies Inc. UBER,
is considering acquiring food delivery company Postmates for around $ 2.6 billion, Evercore ISI analyst Benjamin Black had a mixed view of the possible deal. “If the deal were approved by regulators, we believe the street would see it as an added value given the strong industrial logic,” he wrote in a note to clients, “although with three scaled players remaining in the market, it’s debatable on as to how impactful this transaction will be to accelerate the schedule at rational prices. ” Black sees opportunities for Uber Eats to recognize cost synergies if he sticks to a deal, and says the company could end “some fortified cities” in a narrower market for food delivery operators. At the same time, he said that a larger scale “could come at a cost” as Uber faces the possibility of “modest regulatory hurdles”, a rival offer from an industry partner that could increase the purchase price, or a rival offer from a stranger who could contribute to an even more competitive landscape. It has a higher rating and a $ 45 price target on Uber shares, which rose 4.6% in trading on Tuesday. They have gained 31% in the last three months as S&P 500 SPX,
has gained 18%.
.
