Eminence Capital said the offer price made by Takeaway.com does not reflect the intrinsic value of Just Eat.
On Tuesday (3 September), Eminence Capital, a top-10 investor in Just Eat, said that it would vote against the company’s £9bn merger with Takeaway.com.
The deal between the two food delivery companies was announced on 29 July. At that stage, a number of terms had already been agreed upon.
The merger between Just Eat and its Dutch competitor could create one of the world’s biggest online food delivery firms, with 40m customers across 20 countries. It could potentially be a market leader in the UK, the Netherlands, Canada and Germany – particularly now that Deliveroo has pulled out of the German market.
However, Eminence Capital has said it does not support the deal under the agreed terms. The US asset management firm owns 4.4pc of Just Eat, making it one of the company’s top investors.
Eminence Capital said Takeaway.com’s offer was “highly opportunistic” and represented a “gross undervaluation” of the UK takeaway marketplace.
It claimed the terms of the deal were “grossly inadequate to Just Eat shareholders, despite a sound strategic rationale for the merger”.
This morning, the Financial Times reported that Takeaway.com’s offer gave Just Eat’s shares an implied value of 731p per share – a premium of 15pc on its closing price before news of the tie-up first emerged. However, since then, Just Eat’s stock has consistently traded between 775.80p and 800p.
Ricky Sandler, chief executive and chief investment officer at Eminence, said: “We believe that a valuation disparity of this degree is unprecedented in similar transactions over the past decade.”
“The proposed financial terms are far too favourable to [Takeaway] shareholders and far too unfavourable to [Just Eat] shareholders. Accordingly, we intend to vote against this arrangement.”
Another of Just Eat’s top-10 investors, Aberdeen Standard Investments, added that the offer price “does not fully reflect the intrinsic value of the group”.
Aberdeen Standard’s investment director, Frederik Nassauer, said: “As the share price continues to trade above the offer price, we (as well as the market) currently expect the offer will be raised in the coming weeks.”