Takeaway.com nudges closer to Just Eat

DURBAN – Takeaway.com has upped the ante in the stakes to acquire Just Eat after it said yesterday that it was planning to proceed with a £4.9 billion (R94.97bn) all-share offer for British online food order and delivery service company and block a rival bid from internet giant Prosus. 

Takeaway.com, which is listed in Amsterdam, agreed to merge with Just Eat in August through a scheme of arrangement. 

However, after Prosus entered the bidding war with Takeaway.com, reports yesterday said the Dutch company intended to buy Just Eat through an offer with a shareholder acceptance threshold of 75 percent, adding that such a structure would increase the chances of the deal going through. 

Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said Takeaway.com had only changed the structure of the proposed transaction to allow it flexibility with the required shareholder votes, but had not changed the share exchange ratios and, consequently, the current value of its all-share offer for Just Eat is still materially below the 710p all-cash offer from Prosus. 

“Our view therefore remains that Prosus has a better deal for Just Eat shareholders. Whether it is a fair price or not depends on Just Eat shareholders’ risk tolerance and expected future returns from the growth of the food delivery market. Although Prosus is offering close to 20 percent premium, there must be some value left on the table for them to extract in the long term as we believe it is unlikely that they are desperate to acquire Just Eat,” Takaendesa said.

Takaendesa said the Just Eat share price had come off a bit in the past week, but it was still trading above the Prosus offer price as some investors were still expecting a bidding war between Prosus and Takeaway.com. 

“The unchanged valuation terms of the Takeaway.com offer announced today (yesterday) must be somewhat disappointing to Just Eat shareholders. If I were Just Eat shareholder, I would accept whoever comes with the highest cash offer as we believe valuations are currently high for companies in this sector and there may be an opportunity to re-enter the sector at cheaper levels over the medium term, especially if the global economy continues to slow,” he said.        

Just Eat’s board favoured the Takeaway.com’s offer and recommended to its shareholders to accept the Takeaway.com offer. This comes after Prosus last month unveiled an audacious £4.9bn bid for Just Eat. 

Just Eat has adjourned shareholder meetings related to the earlier Takeaway structure indefinitely, which was scheduled to take place on December 4.

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