Just Eat (LON: JE) have been at the centre of an ongoing battle between Prosus (JSE: PRX) and Takeaway.com NV (AMS: TKWY),
Just Eat, who are a FTSE100 (INDEXFTSE: UKX) listed firm have been flirting with rumors of a potential takeover deal, however Prosus and Takeaway.com have been locked in a vicious battle to make the acquisition permanent.
Shares in Just Eat currently trade at 780p (+0.46%). 9/12/19 12:32BST.
At the end of November, it appeared that both parties from takeaway.com and Just Eat looked to push a deal amid market pressures.
However, the persistence of Prosus stopped the two firms finalizing a deal as Prosus increased their bid in a battle of money and stubbornness.
Last week, Takeaway.com accused Prosus of scaremongering in an attempt to persuade shareholders to accept Prosus’ low ball cash offer.
Cat Rock Capital Management LP, who said on Monday that Just Eat shareholders would be better accepting the deal proposed by takeaway.com rather than from Prosus, who recently spun off from Naspers (JSE: NPN), had their say on the deal.
Today, Just Eat updated the market by saying that they are reviewing the increased offer from Prosus and are advising shareholders to hold off from accepting the proposition.
Prosus, earlier on Monday, increased its offer for London-listed Just Eat to 740 pence per share, giving Just Eat a value of £5.1 billion.
The all-cash offer represents a 26% premium to Just Eat’s closing price on October 21, the day before Prosus’s first bid for the company.
Prosus Chief Executive Bob van Dijk said: “Following the announcement of our offer, we have had the opportunity to listen to the views of Just Eat shareholders, share our perspective on the global food delivery sector and reflect on the unquestionable challenges Just Eat faces, as clearly seen in its third quarter results. We have also had extensive discussions with our own shareholders with regards to our long-term strategy for food delivery and Just Eat’s role within that.”
Prosus believes Just Eat is an “attractive business with strong long-term potential” but is facing “significant challenges”.
“Just Eat’s historically strong market positions are being eroded by intensifying competition in the UK and other core markets, including Spain and Italy, with market share loss recently accelerating in a number of markets,” Prosus added.
Prosus believes Just Eat has
“underinvested” in addressing these problems. The company also believes the Takeaway.com offer “carries significant risk” and Takeaway.com “takes a narrow view of the food delivery sector”.
Van Dijk added: “We continue to believe in the sector and, as we have demonstrated in Brazil, if you act decisively and invest effectively in technology as well as the opportunities of own-delivery, then you can build an attractive growth business that is equipped to win in the long-term. We believe the investment required is substantial and this impacts our view of potential returns. As disciplined investors we obviously need to factor the required investment into our value considerations.”
Together, we have the opportunity to combine two fantastic companies with huge growth potential. Our Takeaway.com offer provides you with the opportunity to benefit from significant long-term value creation from the Just Eat Takeaway.com combination. We encourage you to join us on our journey and accept the Takeaway.com offer without delay,” said Takeaway.com Founder & Chief Executive Jitse Groen.
A little while earlier, an additional update was provided with the following being said.
“The revised Prosus offer of 740p remains derisory as a cash exit price,” Takeaway.com’s Groen said on Monday. “It represents a premium of only 16% to Just Eat’s undisturbed share price of 636p on July 26. This is materially lower than the median premium paid for precedent offers for UK companies over the last 10 years of 40%, and a discount of 9% to Just Eat’s recent high share price of 812 pence on August 13.”
He continued: “This opportunistic offer significantly undervalues Just Eat and the value that the Just Eat Takeaway.com combination will deliver to shareholders. Under the Takeaway.com offer, if the combined group’s shares were valued at Takeaway.com’s average trading multiple since its IPO in 2016, Just Eat’s shares would be illustratively worth about GBP11 each.”
