Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list switches Just Eat deal structure as Prosus circles

Published 11/04/2019, 06:16 AM
Updated 11/04/2019, 06:16 AM
© Reuters. Signage for Just Eat is seen on the window of a restaurant in London

By Noor Zainab Hussain and Toby Sterling

(Reuters) - (AS:TKWY) has changed its line of attack in the battle to buy food delivery ordering service Just Eat (L:JE), effectively lowering the threshold for approval of its offer to fend off rival suitor Prosus (AS:PRX).

Just Eat had previously agreed on the terms of a 4.7 billion pound all-share deal that prompted internet giant Prosus to weigh in with an unsolicited cash offer of $6.3 billion, or 710 pence per share, setting an increasingly fractious contest in motion.

A merger of Takeaway and Just Eat would create one of the biggest food delivery groups outside China, rivaling Uber Eats (N:UBER), with market leadership in Britain, Germany, the Netherlands and Canada.

At Takeaway's current share price of 72.45 euros, its offer is valued at 607 pence per share, equating to roughly $5.3 billion.

Takeaway announced on Monday that it had changed the structure of its takeover attempt from a scheme of arrangement that needed 75% approval by both sets of shareholders to a formal offer that requires 75% of Just Eat shareholders to give the nod.

If the Takeover panel agrees, that could drop as low as 50% plus one share.

"With this switch, we provide additional deal certainty to the Just Eat shareholders," said Takeaway CEO Jitse Groen.

Just Eat's board unanimously recommended its shareholders accept the Takeaway offer.

Takeaway spokesman Joris Wilton said the new structure gives the company "increased flexibility" in the fight, including the possibility that the deal could be allowed to go through with a bare majority of 50%.

Shares in Just Eat rose 0.5% to 740 pence, significantly above the Prosus offer, indicating that investors expect a higher bid from one side or the other.

Wilton said Takeaway has no plans to raise its bid or add a cash component. Prosus could not immediately be reached for comment and Just Eat did not respond immediately to a request for comment.

The change also means that a planned Dec. 4 shareholder vote on the original agreement has been put on hold. Takeaway will instead launch a tender offer that is expected to expire before the end of the year, Wilton said.

"All eyes will be on whether Prosus increases its offer," Credit Suisse (SIX:CSGN) analysts said.

Takeaway and Just Eat share at least six investors, including Cat Rock, Refinitiv data shows.

The takeover battle heated up last month after Cat Rock accused German rival Delivery Hero (DE:DHER), which is 22% owned by Prosus, of selling down its 13% stake in Takeaway to suppress the value of the shares and lower the attractiveness of Takeaway's offer.

© Reuters. Signage for Just Eat is seen on the window of a restaurant in London

(This story fixes typographical error in second paragraph)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.