In the finally won Takeaway vs Just Eat war, Prosus loses out
Just Eat has accepted an all-share Takeaway.com offer of £5.9bn to create one of the world’s largest meal delivery companies
Amsterdam — Online food ordering company Takeaway.com has won the battle for Britain’s Just Eat with a £5.9bn all-share offer that will create one of the world’s largest meal delivery companies.
Takeaway said that 80.4% of Just Eat shareholders had agreed to its all-share offer, passing a 50% threshold needed to make the offer unconditional.
“I am thrilled,” said Takeaway CEO Jitse Groen in a statement. “Just Eat Takeaway.com is a dream combination and I am very much looking forward to leading the company for many years to come.”
Takeaway’s bid was worth 889p per share at the latest close. That trumped a rival bid of 800p per share in cash from tech investment giant Prosus.
The merged company, which will be led by Takeaway CEO Groen, will have its headquarters in Amsterdam and a listing in London, with 23 subsidiaries in countries mostly in Europe, but also in Canada, Australia, and Latin America.
Takeaway says the combination will handle orders worth more than any non-Chinese rival, including GrubHub, Delivery Hero, and Uber Eats.
While ending a colourful takeover battle, the victory starts the difficult task for Takeaway of integrating Just Eat. As an indication, Takeaway has said the combined company would have had sales of €1.21bn and a loss of €43m on a pro forma basis in 2018, though both have seen strong sales growth in 2019.
Takeaway says the combination will achieve annual cost savings of about €20m from centralising orders on its platform, as well as from unifying brands and better procurement.
Prosus, which has investments in delivery services around the world, including in Germany-based Delivery Hero, may eventually wind up with a consolation prize. As part of merger plans, Takeaway has said it will likely sell Just Eat’s 33% stake in iFood, Latin America’s biggest food site, including its strong Brazilian subsidiary. Prosus controls iFood.
A long food fight
The fight to buy Just Eat began in August when Takeaway struck a management-backed deal to buy Just Eat that would see Takeaway holding a 48% stake in the combined firm. That plan was up-ended when Prosus laid down the first of three unsolicited rival bids in October. All were rejected as inadequate by Just Eat managers.
Prosus argued that Takeaway was underestimating the investment needed to fend off rivals such as Uber Eats and Amazon. Takeaway’s Groen responded that food delivery was a low-margin business, and investments should focus on becoming the dominant ordering platform.
The fight reached a dramatic climax on December 19, when Prosus made its final offer and Takeaway responded minutes later with a higher bid, cutting the share of the merged company that will go to its own shareholders to 42.5%.
Takeaway will have to prove the business model it has pursued in Germany and the Netherlands — which has led to rapid sales growth and improving core earnings — will eventually lead to lasting profitability for the group.