After Just Eat stakeholders voiced opposition to the potential Takeaway.com merger, South African investment group Prosus launched a takeover offer.
This morning (22 October), the Guardian reported that global investment group Prosus had launched a £4.9bn all-cash offer for UK-based food delivery firm Just Eat, but this bid was swiftly rejected.
Over the last few months, Just Eat looked set to merge with Dutch giant Takeaway.com in a £9bn deal. However, in September, one of the company’s main shareholders, Eminence Capital, aired its opposition to the deal, branding it a “gross undervaluation” of Just Eat’s business.
Prosus, which part of South African tech investing giant Naspers, then approached Just Eat’s board of directors, according to the Guardian. The investment firm offered to pay 20pc more than Takeaway.com for Just Eat.
The announcement came after Just Eat reported its quarterly figures this week. Revenue growth was down from 30pc in the first half of the year to 25pc in the third quarter, with revenue standing at £247.5m. Total orders grew by 16pc to 62m, compared to the 21pc increase in the first half of the year.
Some commentators were confused as to why Prosus would make a larger offer for the company immediately after it reported a slowdown.
Naspers spinoff Prosus in with a massive 5 billion pound bid for Just Eat – 20% higher than https://t.co/YpjyM4OpwN‘s offer. This is a day after Just Eat reported orders were slowing in a highly competitive UK market. What am I missing?!
— Adveith Nair (@Adveith) October 22, 2019
However, things are heating up in the food delivery market, with Amazon vying for a significant stake in the firm’s main UK competitor, Deliveroo.
In a statement, Prosus said that the two boards “have not managed to reach agreement”.
“Consequently, Prosus is making this announcement in order to give Just Eat Shareholders the opportunity to consider the offer. Prosus believes that the business will require substantial investment, in excess of that planned by Just Eat management.”
Prosus CEO Bob van Dijk added: “We presented this idea to the board of Just Eat, in good faith, but we have been unable to engage constructively in what we see as a compelling proposition for Just Eat shareholders.”
After the offer was made, the takeaway firm’s shares climbed by 24pc to 731p. However, the offer seems to have been met with a chilly reception by the company, which plans to press ahead with the Takeaway.com deal.
In a statement, Just Eat said that Prosus’s proposal “significantly undervalues Just Eat and its attractive assets”, both as a standalone business and as a company merged with Takeaway.com.
“Accordingly, the board of Just Eat unanimously recommends that shareholders reject the Prosus offer.”