Takeaway.com Accuses Rival Just Eat Bidder Of "Scaremongering"

(Alliance News) - Takeaway.com NV on Tuesday responded to what it described as "scaremongering" ...

Alliance News 3 December, 2019 | 8:37AM
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(Alliance News) - Takeaway.com NV on Tuesday responded to what it described as "scaremongering" by opposing Just Eat PLC bidder Prosus NV.

Takeaway.com and Just Eat agreed to a merger in July, under which Just Eat shareholders would get 0.09744 of a Takeaway.com share for each Just Eat share held, implying a value for Just Eat at 731 pence per share based on Takeaway.com's closing share price on July 26 of EUR83.55.

Shares in Just Eat closed at 765.00p on Monday in London, while Dutch firm Takeaway.com's shares closed at EUR82.00 in Amsterdam on Monday. Just Eat was down 0.1% at 764.00p early Tuesday, while Takeaway.com was up 0.4% at EUR82.30.

Then, in October, Prosus launched an all-cash 710p per share, or GBP4.9 billion, counter bid for Just Eat. The Prosus offer has been rejected by Just Eat.

Takeaway.com on Tuesday said it "believes Prosus has made a number of statements which should be seen as scaremongering in an attempt to persuade shareholders to sell out and accept Prosus's low-ball cash offer."

Jitse Groen, Takeaway.com's chief executive, said: "Prosus has made a number of claims over the last few weeks in an attempt to make its highly opportunistic cash offer for Just Eat appear more attractive. It persistently makes contradictory assertions about large future investment requirements and significant risks for shareholders in remaining invested in Just Eat, while itself wanting to assume those apparent costs and risks.

"Our strategy, management team, operational capability and perfect geographic fit make us the ideal partner for Just Eat. The all-share merger with Takeaway.com gives Just Eat shareholders the ability to participate fully in the value creation opportunity. Takeaway.com's management team has a proven track record and decades of experience within the online food delivery sector, which contrasts with Prosus who have never operated a business within it."

The comments echoes the sentiment expressed by Cat Rock Capital Management LP on Monday when it said Just Eat shareholders would be better off accepting a merger with Takeaway.com unless Prosus, an internet and media firm which recently spun-off from South African media giant Naspers Ltd, ups its bid.

Activist investor Cat Rock holds 17.7 million shares in online takeaway platform Just Eat, equivalent to a stake of around 3%. On Monday it sent an open letter to Just Eat's shareholders, urging them to accept the Takeaway.com merger.

Alex Captain, founder & managing partner at Cat Rock, said: "The Prosus offer of 710p per share is not remotely close to our assessment of fair value for Just Eat. We think a Prosus bid needs to be at least 5.0 times 2020 consensus revenue, or 925p per share, in order to compete with a Takeaway.com merger that we believe could comfortably be worth 1,200p per share by the end of 2020.

Captain also said that while Cat Rock is pleased Just Eat received a bid from Prosus, the level of the offer has left it "deeply disappointed". He also lashed out at "a number of claims about Just Eat and Takeaway.com" which Captain said were "aimed at convincing shareholders not to support their merger".

Cat Rock also highlighted the risk of Prosus reducing its acceptance threshold to 50% and one share.

"If this occurs," said Capitain, "Just Eat shareholders who choose not to accept the Prosus offer will be faced with the prospect of becoming minority shareholders in a publicly-traded entity with majority Prosus ownership. Therefore with a 50% threshold, Just Eat shareholders could feel compelled to accept a Prosus bid that is substantially below fair value, particularly if merger arbitrage funds continue to increase their ownership of Just Eat stock.

"We urge other Just Eat shareholders to join us in accepting the Takeaway.com offer that the Just Eat Board has unanimously recommended."

By Anna Farley; annafarley@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Just Eat PLC
Naspers Ltd Class N 323,990.00 ZAC -2.38 -
Prosus NV Ordinary Shares - Class N 86.36 EUR -2.09 -

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