Postmates probably agrees with the adage, "A bird in the hand is worth two in the bush." Though in the meal delivery specialist's case, it's $2.65 billion in the hand, as it reportedly has agreed to accept Uber Technologies' (UBER 3.78%) all-stock takeover offer in that amount.
Bloomberg says Uber's board approved the deal, which could be announced as soon as today. If true, it would scuttle Postmates' plans of filing for an IPO this week.
Taking the sure thing
Uber had been sniffing around Postmates following a failed attempt to acquire Grubhub, which chose instead to be bought by Europe's Just Eat Takeaway.com (JTKWY 3.90%). But Postmates was believed to be hesitant about the $2.6 billion the ride-hailing company was reportedly offering.
The slightly sweetened pot, though, was apparently considered a better bet than the mercurial IPO route, even though the market seemed to be strengthening. While IPO activity had fallen sharply in the second quarter of 2020 with new issues nearly cut in half compared to a year ago, it began rebounding again last month with tech stocks like Vroom going public at the high end of their expected ranges.
The deal is important for Uber since it needs to shore up its performance. Ridesharing fares declined during the pandemic, but its Uber Eats division has been strong, with restaurants closed for dine-in seating having to make do with takeout and delivery.
Postmates was one of the early innovators in the space, but has trailed others that entered the market afterward. According to data research firm Second Measure, Postmates had an 8% share of the meal delivery market, behind Uber, DoorDash, and Grubhub.