A Just Eat sign on a restaurant window in London. Just Eat’s board has continued to recommend the Takeaway offer, despite a better deal from Prosus, and has advised shareholders not to take action while they studied the new offer. Photo: Toby Melville/Reuters
A Just Eat sign on a restaurant window in London. Just Eat’s board has continued to recommend the Takeaway offer, despite a better deal from Prosus, and has advised shareholders not to take action while they studied the new offer. Photo: Toby Melville/Reuters

Prosus raises its offer for Just Eat to £7.40 a share

By Sandile Mchunu Time of article published Dec 10, 2019

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DURBAN – Naspers’ international internet division, Prosus, yesterday upped its bid for UK food delivery company Just Eat to £5.1 billion (R97.84bn), sending a strong message to Dutch rival Takeaway.com. Prosus increased the offer for Takeaway from the £4.9bn it had made in October. 

It said it wanted to break up the agreed merger between Just Eat and Takeaway, a deal that would create one of the world’s largest online food delivery companies. 

Prosus increased its offer to 740 pence a share from its initial offer of 710p. The new offer represents a 25.6 percent premium to the closing price of 589p a Just Eat share on October 21. Prosus also reduced the level of acceptances required from 75 percent to a simple majority, 50-percent-plus-one Just Eat share. 

The closing date for Just Eat shareholders to decide on the increased offer was extended to December 27.

Prosus chief executive Bob van Dijk said the group had an opportunity to listen to the views of Just Eat shareholders, share their perspective on the global food delivery sector and reflect on the challenges Just Eat faces, as 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,” Van Dijk said.

“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.” 

Just Eat’s board has continued to recommend the Takeaway offer, despite a better deal from Prosus, and has advised shareholders not to take action while they studied the new offer.

Peter Takaendesa, a head of equities at Mergence Investment Managers, said the increased offer from Prosus was largely expected, as Just Eat’s share had been trading well above both the Prosus and Takeaway offers. 

“The increased Prosus offer price, as well as the lowered acceptance threshold to 50 percent, have increased the chance of the transaction concluding, but the Just Eat share price has remained higher than the revised 740p offered by Prosus. This suggests that Just Eat shareholders are expecting the competing bidders to increase their offers further. 

“The deadline for the Takeaway offer is coming up over the next few days and will be interesting to see if they will increase their offer and if the Just Eat board will change its recommendation that has been in favour of Takeaway,” Takaendesa said. 

Prosus shares rose 0.43 percent on the JSE on Monday to close at R969.75.

BUSINESS REPORT

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