Shares in online food delivery service Just Eat tumbled as much as seven per cent in early morning trading, as news emerged that Uber is reportedly looking to buy rival competitor Deliveroo.
Shares in the market leader Just Eat dropped to 647p, with other European food delivery firms Delivery Hero and Takeaway.com also being dragged down this morning.
Yesterday Bloomberg reported that Uber was in the early stages of acquiring Deliveroo for “several billion dollars”.
Uber has ramped up its food delivery service since launching Uber Eats in 2014, with the firm on track to report revenues of $6bn (£4.5bn) this year.
Investors have been spooked by the latest news that Uber could buy Deliveroo, one of Europe’s most successful and fast-growing start-ups, adding more pressure to firms like Just Eat in an increasingly competitive takeaway market.
AJ Bell investment director Russ Mould said: "They say strength in numbers can be a powerful force and so it is no surprise that Just Eat’s shares have taken a big hit on speculation that Uber is going to buy Deliveroo."
He added: "The combination of two competitors is the last thing Just Eat wants to hear, particularly when it is already trying to play catch up on the delivery side of its business."
Liberum analyst Ian Whittaker said investors in Just Eat should feel "reasonably comfortable" even if a Deliveroo-Uber deal goes ahead for several reasons.
He said Just Eat’s strategy "focused on so-called second tier towns (nearly two-thirds of Just Eat’s customers in the UK, for example, are outside the 11 top cities) where Uber and Deliveroo is naturally weaker than the big cities".
Uber Eats drivers abandoned their scooters yesterday to protest about changes to their payment structure.