Just Eat has agreed the sale of Grubhub at an eye-watering discount to the $7.3billion it paid for the struggling US food delivery business just three years ago.

The group, which bought Grubhub in June 2021, told shareholders on Wednesday it would sell the unit to US rival Wonder Group for an enterprise value of $650million.

Just Eat said the value of the transaction reflects expectations New York City will amend its delivery fee caps 'in the near term'.

The city currently limits how much third-party delivery services can charge restaurants for their services, and proposed changes would allow firms like Grubhub to collect total commissions of up to 43 per cent of the order total.

The US market has proved a hindrance to Just Eat's performance for some time and the group has previously indicated plans for the full or partial sale of Grubhub.

Just Eat sales slumped last month after the group revealed a heavy hit to sales from an 11 per cent fall in North American gross transaction value (GTV) during the third quarter.

The group said the disposal of Grubhub would boost its 'ability to support investment in countries in which it has the greatest competitive advantage', while improving, liquidity, GTV growth and free cash flow generation.

The deal is expected to be completed in the third quarter, subject to regulatory approval.

Jitse Groen, founder and chief executive of Just Eat Takeaway, said: 'The sale of Grubhub to Wonder will increase the cash generation capabilities of Just Eat Takeaway.com and will accelerate our growth.'

Just Eat shares soared 19.8 per cent to 1,127.32p at the open on Wednesday. They have fallen 88.7 per cent since their October 2020 peak and 85.5 per cent since listing in February of that year.