Yelp to sell Eat24 for $287.5 million, authorises share repurchase

SAN FRANCISCO: Yelp Inc said on Thursday it would sell its Eat24 business to Grubhub for $287.5 million in cash, news along with better-than-expected quarterly revenue that drove its shares up more than 18 per cent.
The consumer review website operator also said its board had authorized a $200 million share repurchase program.
Shares of Grubhub, meanwhile, fell 7 per cent in extended trade. The online food delivery platform reported second-quarter revenue up 32 per cent to $159 million, slightly above the $158 million expected on average by analysts, according to Thomson Reuters data. Yelp said it would enter a long-term strategic partnership in which it would integrate online ordering from restaurants on Grubhub’s site.
Yelp’s second-quarter revenue rose 20 per cent to $209 million, above the $205 million expected by analysts, on average. Net income of $7.6 million far exceeded $400,000 a year earlier. Earnings per share were 9 cents per share, versus 1 cent per share, a year ago.
Investors were cheered by the beat in revenue after Yelp missed first-quarter revenue estimates, along with news of the sale and the repurchase program.
“It’s a sign that execution is back on track,” analyst Matthew Thornton of Suntrust Robinson Humphrey Capital Markets said. — Reuters