Platter Food
Platter Food. Image by 지원 이 from Pixabay

The board of Just Eat, the online food delivery platform, says the revised bid offer by tech giant Prosus undervalues the business.

“The Board of Just Eat has now considered the terms of the Prosus offer and continues to believe that it significantly undervalues Just Eat and its attractive assets and prospects both on a standalone basis and as part of the proposed recommended all-share combination with Takeaway.com,” the company’s board informed investors on Tuesday.

On Monday, Naspers-owned Prosus sweetened its offer to 740p offer a share. The increased offer is at a 25.6% premium to Just Eat’s closing share price on 21 October 2019. For more read: Naspers’ Prosus Ups Offer for Just Eat to R98bn

In October, the Euronext and JSE-listed tech giant made a bid of 4.9 billion pounds ($6.35 billion or R94 billion) or 710 pence a share, in cash for Just Eat. For more read: Naspers’ Prosus Makes R94bn Bid For Just Eat

Just Eat rejected this £5bn hostile swoop by Prosus, the Dutch arm of South Africa internet titan Naspers. Its board is instead recommending investors support a planned merger with Takeaway.com that was announced this summer.

“Just Eat is a leading, strategic asset in the food delivery sector and the board of Just Eat continues to believe that the Prosus offer fails to reflect appropriately the quality of Just Eat and its attractive assets and prospects, the benefits of first-mover advantage in a consolidating sector, and, on the basis of its own analysis, the future upside available to Just Eat shareholders through remaining invested in Just Eat and the Takeaway.com combination,” said Just Eat’s board.

The board added that it “unanimously recommends that shareholders reject the Prosus offer of 740 pence per share and continues to believe that the Takeaway.com combination 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.”

Instead, the board of Just Eat unanimously recommended that Just Eat investors accept the Takeaway.com offer.

Prosus said it continues to believe that Just Eat is an attractive business, albeit one that requires an investment which has now also been acknowledged by the Just Eat Board, which Prosus has taken into account when assessing the targeted return on investment for its shareholders and the price it can justify offering for Just Eat.

Just Eat shareholders have until 3 pm SA time on December 27 to accept the Prosus offer.

Prosus is a strategic global investor and operator focused on creating long-term value by building and scaling consumer internet businesses through organic growth and strategic M&A. It aims to build strong companies that create value by addressing big societal needs in high-growth markets with long-term potential.

The company owns big food delivery brands such as iFood, Swiggy and DeliveryHero.

Prosus came to market in September 2019 through the listing of the international internet assets of Naspers, a global consumer internet group and remains 74.06% owned by Naspers.

Its businesses and investments serve more than 1.5 billion people in 89 markets and are amongst the leading players in 77 of those markets. The group directly employs more than 20,000 people globally, with many more employed by its associates.

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