Spanish authority gives Prosus the green light for Just Eat bid
In the face of continued opposition to its proposed takeover of UK online food delivery business Just Eat, technology investor Prosus got a reprieve as Spain’s competition authority gave its bid the go-ahead.
On Wednesday, Prosus said the Spanish Markets and Competition Commission cleared the acquisition of Just Eat by MIH under the Spanish Competition Act.
Prosus said Spain was the only country where Just Eat’s market share warranted competition clearance.
“We are pleased to have cleared the competition hurdle which further underlines the certainty and deliverability of our superior cash offer of 740p per share to Just Eat shareholders,” said Prosus group CEO Bob van Dijk.
This comes as Just Eat, the online food delivery platform at the centre of a takeover battle between Prosus and Takeaway.com, said its board unanimously agreed shareholders should reject a revised offer from Prosus.
Just Eat said the revised Prosus offer of £5.1bn (R98.32bn) failed to reflect the quality of the company’s assets and prospects, as well as the benefits of first-mover advantage in a consolidating sector.
Naspers subsidiary Prosus on Tuesday sweetened its offer to 740p, having previously offered 710p a share, or £4.9bn in October. This had also been rejected by the board of Just Eat.
The offer comes as Prosus seeks to build a bigger food delivery business to take on Silicon Valley company Uber Eats and Amazon-backed Deliveroo.
Prosus on Tuesday lowered the minimum number of Just Eat shareholders who need to accept the deal for it to go through to 50%, from 75% previously. Combined with its cash resources, the company said its increased offer is “therefore clearly superior to the Takeaway.com offer both in terms of value offered and deal certainty”.
Just Eat said on Tuesday shareholders should instead accept the Takeaway.com offer, as it would allow shareholders to participate in the upside potential of the enlarged group, which would create greater value than the offer from Prosus.
In a letter to shareholders when Just Eat’s board told shareholders to reject Prosus’s previous offer, chair Mark Evans said: “Our market-leading consumer brand recognition has been complemented by over £500m of investment in the development and acquisition of technology and software-enabled platforms since 2016.”
He also highlighted that Prosus is only offering 4.8 times Just Eat’s 2019 revenue. “This is significantly lower than the average multiples of comparable transactions in the online food delivery sector, most notably the multiple that Naspers, a 74% shareholder in Prosus, paid for its investment in Delivery Hero in September 2017,” Evans said.
Prosus ended Wednesday marginally higher at R971 a share, up 0.13%.
Just Eat’s share also saw marginal gains, up 0.077% at 781,60p (R152.78) a share, to give a £5.34bn (R104.38bn) market value.
Just Eat shareholders have until 3pm SA time on December 27 to accept the offer from Prosus, the Naspers subsidiary said on Tuesday.