Just Eat rejects hostile £5bn takeover from South Africa’s Naspers

Edmund Heaphy
Finance and news reporter
Signage for Just Eat is seen on the window of a restaurant in London, Britain, August 5, 2019. REUTERS/Toby Melville.

The board of Just Eat (JE.L) has unanimously recommended that the company’s shareholders reject a hostile £4.9bn all-cash offer from a unit of South African technology investment firm Naspers.

Prosus (PRX.AS), which is Europe’s largest consumer internet company, on Tuesday offered Just Eat shareholders a 20% premium on the price offered to them as part of the proposed all-stock merger with the Dutch Takeaway.com.

Just Eat said that the Prosus offer “significantly undervalues” Just Eat, both as a standalone business and as part of the proposed tie-up with Takeaway.com

“The board believes that the Takeaway.com combination provides Just Eat shareholders with greater value creation than the terms of the Prosus offer,” Just Eat said on Tuesday.

Prosus is majority owned by Naspers, and launched on the Amsterdam stock exchange early last month.

In July, the London-based Just Eat said that it had agreed to merge with Takeaway.com, creating an £9bn company with roughly 360m global takeaway orders.

Under the proposed all-stock deal, which would be structured as a takeover of Just Eat by Takeaway.com, Just Eat shareholders are being offered stock valued at 594p a share, a 15% premium on the July trading price.

Shares in Just Eat had declined to around 589p since the Takeaway.com offer, however. They surged by almost 25% on Tuesday, to 733p, in the wake of the Prosus bid, which offered 710p per share.

Just Eat had been under sustained pressure from activist investor Cat Rock Capital to combine with a rival delivery firm. But Eminence Capital, one of Just Eat’s largest shareholders, had called the Takeaway.com offer “high opportunistic”, saying it grossly undervalued the company.

Cat Rock said on Tuesday that the Prosus offer underscored “the significant long-term potential and strategic value of Just Eat’s business.” But it said that the Takeaway.com was “more attractive” because it allowed shareholders to participate in the future of the company.

It called on Prosus to “immediately cease market actions” that could interfere with the market value of the combined company.

Both Just Eat and Takeaway.com are in a heated battle in Europe with Deliveroo and Uber Eats. Amazon in May announced a £575m investment in Deliveroo, but that deal has been put on hold pending an inquiry by the competition watchdog.

Prosus has a valuation of more than €100bn, largely thanks to stakes in technology companies such as Tencent. It controls iFood, the largest food delivery company in Latin America.