By Cara Lombardo

Uber Technologies Inc. and Grubhub Inc. are discussing a takeover valuing Grubhub at roughly $6 billion, with big cost savings that would help pay for the deal, according to people familiar with the matter.

The companies are considering a deal that would value Grubhub stock at around 1.9 Uber shares, or just over $60 per 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% Tuesday, the day the merger talks surfaced, closing 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 see opportunity in the rapidly changing industry landscape. 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.

(More to Come)

(END) Dow Jones Newswires

May 13, 2020 16:05 ET (20:05 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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