INTERNATIONAL - Just Eat Plc has rejected Prosus NV’s higher bid saying that the latest bid still significantly undervalues the company.
Prosus raised its offer for the U.K. food delivery firm by 4.2 percent to 740 pence-per-share offer on Monday. Just Eat advised shareholders to stick with an all-share combination with Takeaway.com NV in a statement on Tuesday.
Just Eat’s stock has been trading above the offer price as shareholders hold out for a bigger premium. It closed at 781 pence in London trading on Monday valuing the company at about 5.3 billion pounds ($7 billion).
Analysts at Liberum said that the offer undervalued the company and was likely to be rejected by shareholders, while other analysts said Prosus’s bid could put pressure on Takeaway to bump. Cat Rock Capital Management, which owns shares in both Takeaway and Just Eat, has said a Prosus cash bid would need to be 925 pence to compete with the merger.
The Just Eat board recommends the Takeaway offer, which is “based on a compelling strategic rationale that allows shareholders to participate in the upside potential of the enlarged group and, based on its own analysis, will deliver greater value creation to Just Eat Shareholders than the Prosus Offer of 740 pence per share in cash,” the company said in the statement.