Food delivery service Just Eat's takeover offer for rival Hungryhouse has been granted provisional clearance by the UK competition regulator.
The Competition and Markets Authority (CMA) said Thursday (12 October) that is final decision is likely to be published early November, which implies the £200m takeover could get formal approval later in the month.
Both Just Eat and Hungryhouse act as intermediaries, or delivery men, between customers and takeaway restaurants via online platforms, picking up ordered food and taking it to residential and commercial doorsteps.
Earlier in the summer, the CMA expressed worries that the combination of the two companies might result in materially worse terms for restaurants using their respective delivery services.
Following the news, Just Eat's shares predictably spiked topping the FTSE 250 leader board. At 12:55pm BST, the company's shares were up 4.77% or 33.50p to 736.50p, having risen as high as 753p at one point.
AJ Bell investment director Russ Mould said the CMA's conclusion that the deal will not lessen competition will work in favour of Just Eat shares.
"The watchdog felt that Hungryhouse provided limited competition to Just Eat because it was much smaller in size and offered too few unique restaurants, making it increasingly difficult for Hungryhouse to attract and retain consumers."