Yahoo Finance Just Eat in £4.9bn takeover battle as Prosus makes hostile bid
A £4.9bn takeover battle has broken out for Just Eat as the investment group Prosus launched an all-cash offer in an attempt to scupper the food delivery group’s planned merger with its Dutch rival Takeaway.com.
Tech investment firm Prosus, which is part of South African conglomerate Naspers, held talks with Just Eat but, after failing to reach agreement on terms, said it had decided to go directly to shareholders – a process known as a hostile bid.
Bob van Dijk, the chief executive of Prosus, said it had been considering a bid for Just Eat for some time. Prosus already owns a stake in the listed German food delivery group Delivery Hero and controls Brazil’s iFood and India’s Swiggy.
Just Eat was the top riser on the FTSE 100 on Tuesday, with shares soaring 24% to 728p after Prosus announced its 710p-a-share bid. The Prosus offer is a fifth higher than the value of the all-share Takeaway.com bid which was announced in July.
Some analysts suggested the offer was “cheeky” and opportunistic as it followed a fall in the share price of Just Eat after disappointing trading figures released this week. A fall in Takeaway.com’s stock has also reduced the effective value of its agreed all-share bid by nearly 20% since it was launched.
However, Van Dijk said: “This is not opportunistic. We have been thinking about this asset for a long time and we know the team [at Just Eat] as we have been partners together in Brazil [in iFood].”
“What we offer is a significant premium to what’s on the table [from Takeaway.com]. It offers certainty and we think shareholders should have the opportunity to form a point of view. We think they are going to be positive. The hostile labelling is a convention but we don’t see this as hostile.”
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The Prosus boss said he would be talking to Just Eat shareholders in the coming weeks and hoped to continue “constructive discussion” with the company’s board. “We can provide Just Eat with everything it needs to achieve significant growth,” Van Dijk added.
However, the Prosus bid was swiftly rejected by Just Eat, which said it was pressing ahead with the Takeaway.com deal. It published documents laying out the takeover timetable, including a shareholder vote required to approve the deal on 2 December.
“The board of Just Eat has considered the terms of the Prosus offer and believes that it significantly undervalues Just Eat and its attractive assets and prospects both on a standalone basis and as part of the proposed recommended all-share combination with Takeaway.com,” the company said in a statement.
Just Eat said it had “fully engaged” with Prosus but had already rejected initial proposals of 670p and 700p a share.
Shareholder Cat Rock, which owns a 3% stake in Just Eat, said the Prosus bid “dramatically undervalues” the company.
Just Eat’s success was built on an ordering website that linked restaurants with customers. It has recently branched out into deliveries, responding to competition from Uber Eats and Deliveroo.
Prosus said it would provide “substantial investment” to help Just East grow its own delivery business.
The Prosus move comes only a day after Just Eat disappointed investors with its latest financial results. Its revenue growth slowed to 25% in the third quarter, down from 30% in the first half, raising fears that it is losing market share to rivals.
Neil Wilson, the chief market analyst at Markets.com, said: “The Prosus offer is in many ways very cheeky and even more low-ball – it’s still under the 731p initial offer from Takeaway.com and, while it has been rejected, will certainly up the ante and could force Takeaway.com into raising its offer as it looks in a weakened position due to the stock’s decline.”
