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Bidding War Breaks Out for Food Delivery Service Just Eat 

Bidding War Breaks Out for Food Delivery Service Just Eat 

Bidding War Breaks Out for Food Delivery Service Just Eat 
A food delivery courier, working for Just Eat Plc, travels in London, U.K. (Photographer: Simon Dawson/Bloomberg)

(Bloomberg) -- Naspers spinoff Prosus NV swooped in with a 4.9 billion pound ($6.3 billion) hostile offer for U.K. food delivery company Just Eat Plc, challenging a deal with Takeaway.com NV.

Prosus offered 710 pence a share in cash for Just Eat, it said in a statement Tuesday. Takeaway’s original all-stock offer valued Just Eat’s shares at about 731 pence apiece as of July. By Monday’s close, the figure had dropped to about 595 pence as Takeaway’s shares declined following the deal’s announcement.

Just Eat shares jumped above both bidders’ offers, rising as much as 26% to 741.4 pence on the news, the most since July. The company said it had rejected three proposals from Prosus, including this one, opening the door to a bidding war.

Prosus Chief Executive Officer Bob van Dijk said on a call with reporters Tuesday that the company had approached Just Eat’s board but failed to reach an agreement.

Bidding War Breaks Out for Food Delivery Service Just Eat 

“We don’t see this as going hostile,” Van Dijk said on the call. “We want to give shareholders the opportunity to consider this because it’s in their best interest, that’s why we’re putting this forward.”

The CEO said that sustaining Just Eat’s market position “will require significant investment in product, technology and delivery capabilities. That’s something we’re capable of doing.”

Takeaway’s proposal would have given Just Eat shareholders 52% of the combined group and the firms had plans to combine their management and boards. The companies had said they expected to close the deal by the end of the year.

But some investors hadn’t been happy with the proposed sale to Takeaway. In September, analysts at Liberum said the earlier bid undervalued Just Eat, and Eminence Capital said the financial terms were “grossly inadequate.”

Representatives for Takeaway.com didn’t immediately respond to requests for comment.

The food delivery industry has been roiled by mergers of late. Just Eat and Takeaway agreed to their combination less than six months after Takeaway spent about $1 billion for the German operations of rival Delivery Hero SE. Spanish food delivery startup Glovo has also drawn preliminary interest from Uber and Deliveroo in recent months.

Meanwhile, Uber Eats and Deliveroo are currently battling for virtual restaurants, where eateries lease kitchen space to prepare food for couriers. With no dining rooms or wait staff, these outfits pop up where food delivery companies expect demand, and sell their meals through Uber Eats or Deliveroo’s app.

Naspers listed Prosus in Amsterdam last month and still owns 74% of the company, which controls internet companies around the world. While online food delivery has long been a preferred focus, a successful bid for Just Eat would dwarf the $2.8 billion previously spent on the sector.

Naspers has expanded through acquisition since turning a $32 million investment in Chinese giant Tencent Holdings Ltd. into a stake currently worth about $124 billion. The Cape Town-based company focuses on e-commerce companies, with a particular interest in payments and travel booking as well as food.

In its statement, Just Eat said JPMorgan Chase & Co. would provide a bridge loan to Prosus.

--With assistance from Janice Kew and Loni Prinsloo.

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net;Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon, John Bowker

©2019 Bloomberg L.P.