Beleaguered Just Eat investors received some welcome respite this week, as the €1.8bn sale of its stake in Brazil’s iFood sent shares back up by more than 25%.

The group announced a deal to sell its 33% stake in the South American food delivery arm to iFood’s majority owner (and one time Just Eat suitor) Prosus for €1.5bn. A further €300m is contingent on the performance of the online food delivery sector over the next 12 months.

Just Eat said the deal represented an equity multiple of over five times on the investments over the life of the joint venture.

It will retain the transaction proceeds to maintain its balance sheet strength and service repayments of its upcoming debt, while remaining “focused on improving its profitability and on a disciplined allocation of capital”.

Last year Prosus had bid around €2.3bn for the stake. Despite the lower €1.8bn price, Just Eat’s shares rocketed 26.7% on the announcement.

Bernstein said the sale represented “a huge positive for the stock”, despite no cash being returned to shareholders as part of the transaction. “We were not expecting the deal to go through in the short term given the previous offer of €2.3bn (and the implied multiples) and the current market environment,” the broker said.

Even after the share price bump, Just Eat continues to trade around 77% lower year on year. It is around 85% down since touching 1,000p during the home delivery pandemic boom of 2020.

Market observers suggested Just Eat would need to complete a sale of its troubled US Grubhub operations before there could be a fundamental re-rating of the stock.

This week, Just Eat’s management reiterated that they were actively exploring a partial or full sale of Grubhub, but no further information was released. Last month it sold a 2% stake in Grubhub to Amazon, with the option to offload another 11% if the partnership in the US with the tech giant goes well

In the first half, Just Eat Takeaway sank to a €3.5bn (£2.9bn) loss after writing down the value of its Grubhub service, but said it was making “significant progress” towards profitability.

Orders in the six months to the end of June fell 7% year on year to 509.4m as the gloss continues to come off the takeaway sector’s pandemic-driven sales boom.

However, adjusted EBITDA improved in the period, with a loss of €134m being 29% lower than a year ago.

Just Eat said the year-on-year and sequential improvement “clearly demonstrates the path to profitability”.

Earlier this month Jefferies commented: “There is evident (and deserved) optimism that the Amazon partnership gives Grubhub a path back to growth (and EBITDA, bearing in mind above movement on fee caps and the use of Grubhub’s equity to compensate Amazon) quickly.”