Just Eat Has Takeover Bid – BinaryOptions

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Contents

Just Eat Has Takeover Bid

Published on November 5, 2020

Just Eat has been subjected to a counter bid for the business. The fast-food delivery company has been recently looking to take over one of its competitors, but on Tuesday 22nd October, they received a bid that valued it at 710 pence per share. The company that made the bid was Prosus.

A global internet group, Prosus, is one of the biggest technology investors worldwide. It already has shares in iFood, Delivery Hero and Swiggy. Adding Just Eat to their list of takeaway delivery providers, would be a big bonus for Prosus.

As a result of the new takeover bid, the price of the shares in the leading food delivery company in the UK rose to 715 pence per share, a rise of more than 21%.

Not All Rosy News

When Just Eat agreed to buy Takeaway.com, the deal was to create one of the world’s largest online food delivery companies. Their value combined in July was £9 billion. Just Eat shares were at 731 pence per share.

Since then, however, there have been some challenges for the company. The company itself was at the centre of a BBC investigation and has been criticised for some practices, including anti-social behaviour around some of its cooking and delivery hubs.

Just Eat was also criticised for not delivering results when under the control of Peter Plumb. His temporary successor, Peter Duffy, had clearly stated that he didn’t want the job.

At the same time, the deal between Just Eat and Takeaway.com has already been watched carefully.

Many felt that it was Takeaway.com that were the true winners. External analysts have stated that an outside bid was probably going to come. However, many didn’t predict that it would be Prosus that would eventually make the offer.

Worldwide Operations

If the bid is successful, then Prosus would have stakes in food delivery companies across the world and have the largest stake in the industry as a whole. This could lead to improved efficiency for the organisation, better processes and cost savings across the board.

It could also help Just Eat to expand into new areas and improve profitability. Something that the organisation has failed to do over the recent years with previous bosses.

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Just Eat: Second Dutch-based firm makes takeover bid for food-delivery company

Offer from Prosus comes less than three months after Just Eat announced plans to merge with Takeaway.com

  • Olesya Dmitracova Economics and Business Editor @dmitracova
  • Tuesday 22 October 2020 13:15 <<^moreThanTen>>
  • <> comments<>

A bidding war has broken out over Just Eat as it rejected a £4.9bn takeover offer from investment group Prosus, coming less than three months after the takeaway delivery company announced plans to merge with Takeaway.com.

Prosus, a Dutch-listed arm of South Africa’s internet group Naspers, offered 710p a share in cash for Just Eat. This is almost a fifth higher than the offer from Amsterdam-based Takeaway.com.

Still, the board of Just Eat rejected the overture from Prosus as it “significantly undervalues Just Eat and its attractive assets and prospects”, and recommended that shareholders do the same.

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Just Eat is the largest food delivery company in the UK but analysts have criticised its management’s failure to capitalise on its early dominance of the rapidly growing sector, allowing nimbler rivals like Deliveroo to gain ground.

In its statement, aimed at Just Eat shareholders, Prosus said it believes the business will require substantial investment, over and above that planned by the company’s management.

Read more

“Just Eat’s third-quarter trading update demonstrated a significant slowdown in order growth, which highlights the need to accelerate this investment to sustain its competitive advantage,” it said.

“Prosus does not believe that the proposed combination with Takeaway.com will fully or effectively address this investment need.”

Just Eat and Takeaway.com face tough competition from rivals with deep pockets such as Uber Eats and Deliveroo, which is backed by Amazon.

The bid from Prosus follows a string of foreign acquisitions of British companies. Earlier this year, US toymaker Hasbro bought the UK-listed owner of Peppa Pig, while Britain’s biggest pub owner Greene King agreed to sell its entire business to CKA, a Hong Kong real estate group. Meanwhile, Fuller’s, another UK pub group, sold its brewing business to Asahi, Japan’s largest brewer.

Just Eat’s shares surged 20 per cent shortly after Prosus announced its offer and traded about 25 per cent higher on the day in the afternoon.

Neil Wilson, chief market analyst for Markets.com, said: “A bidding war is now on. You may need more like 750 pence [per share] to sort this out.”

He added that a merger or a takeover of sufficient scale would create a company with the heft to take on Deliveroo, Uber Eats and Amazon.

Prosus already has other investments in the food-delivery sector, including iFood in Latin America, Berlin-based Delivery Hero and Swiggy in India.

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