Close-up of the Postmates logo.
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US food delivery service Postmates has received takeover bids from Uber and a special-purpose takeover company, or SPAC, as it simultaneously plans to go public, according to people familiar with the matter.
Postmates has not decided which way to go, although it is expected to make a decision in the coming days, said the people, who asked not to be identified because the discussions are private. Uber’s offer is valued at about $ 2.6 billion, according to the Wall Street Journal. Postmates is working with JPMorgan Chase as a financial advisor, the people said. A JPMorgan spokesman declined to comment.
The SPAC name could not be immediately identified. A SPAC is a shell company with no operations that acquires private companies for the purpose of transitioning to publicly traded entities. Representatives for Uber and Postmates could not be reached for comment.
Uber was previously competing to buy rival food delivery service GrubHub, but the talks were cut short as the two companies couldn’t agree on a price and the ride-sharing company was frustrated with what it perceived to be delaying tactics, as CNBC reported. previously. Instead, GrubHub was sold to the European food delivery service JustEatTakeaway in early June.
Uber quickly altered its plans after the GrubHub deal died and prepared an offer for Postmates, one of the people said. Postmates has considered selling for several years, another person said.
Regulatory uncertainty
One of the sticking points condemned by the Uber deal for GrubHub was how to tackle potential regulatory issues from a draw. While Postmates is smaller than GrubHub, there are only four major players in the U.S. food delivery market – DoorDash, Uber Eats, GrubHub, and Postmates – and any consolidation could raise antitrust concerns.
Uber relies on food delivery to help sustain its business during the coronavirus pandemic, as demand for carpooling has plummeted. In its first-quarter earnings call, Uber said gross booking revenue for its Travel segment decreased 80% in April from a year earlier, while gross booking revenue at Eats increased more than 50% during that same year. period. The New York Times first reported Uber’s offer for Postmates.
Postmates is the fourth largest food delivery service in the US by market share and has struggled to compete domestically against rivals DoorDash, GrubHub and Uber Eats. Still, the company has been successful in specific urban areas like Los Angeles and Miami. Recode reportedly submitted a confidential IPO request in February 2019, but postponed its offer later that year due to deteriorating market conditions and stiff competition.
However, a Reuters report on Monday said the recent series of deals at the food delivery service had convinced him that he would start moving forward with plans for a list as early as next month. The San Francisco-based company was valued at $ 2.4 billion in its last round of fundraising in September, Reuters said.
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