Just Eat merger threatened by Prosus hostile bid

Prosus, Europe’s largest consumer tech company, said Tuesday it had bid £4.9 billion for Just Eat, threatening the latter’s agreed merger deal with peer Takeaway.com.

Prosus’ hostile bid, worth the equivalent of $6.3 billion or 5.7 billion euros, comes one month after a stunning stock market debut left it flush with cash.

While Just Eat swiftly rejected the offer, Prosus could come back with a higher bid, reflected in the British group’s share price surging on Tuesday.

Just Eat’s stock value soared by almost one quarter to £73 on London’s FTSE 100 index, above Prosus’ offer worth £71.

Takeaway.com’s merger deal valued Just Eat at £59.40.

Yet Just East said the Prosus bid “significantly undervalues” the British group.

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

“Accordingly, the board… continues to recommend the Takeaway.com combination to Just Eat shareholders.”

Britain’s Just Eat and Takeaway.com of the Netherlands unveiled in July a plan to join forces to create a heavyweight in the rapidly-growing food delivery sector.

The combination of the two firms would create a delivery platform worth around $11 billion capable of competing against Britain-based Deliveroo and Uber Eats of the United States.

But the deal has now been thrown into doubt by Prosus, which is owned by South African media titan Naspers.

“Just Eat is now a firm target, having been approached by Prosus with a 710 pence cash bid,” said Chris Beauchamp, chief market analyst at IG trading group.

“However, the firm still thinks the Takeaway.com offer is a better one, despite being at a lower price. The response from the share price suggests that a bidding war is now in play.”

Launched on the Amsterdam stock market in September, Prosus saw its value instantly soar to around 123 billion euros ($137 billion).

The subsidiary groups all of Naspers’ internet investments outside of its home market, with investors in particular interested in its 32 percent stake in Chinese internet giant Tencent.

Prosus is already a leading global operator in the food delivery sector having invested around $2.8 billion across more than 40 markets since 2016, its chief executive Bob van Dijk said in a statement Tuesday.

“We believe our global experience and resources can help Just Eat to achieve its significant potential,” he added.