ADVERTISEMENT

Takeaway’s Just Eat Bid Hit by Rival Firm

Takeaway’s Just Eat Bid Hit by Rival Firm

(Bloomberg) -- Takeaway.com NV’s all-stock offer for Just Eat Plc has been hurt by a drop in its share price, and at least part of that decline can be traced back to a company with ties to a rival bidder.

After Takeaway announced the bid, Delivery Hero SE, the company’s second-largest shareholder, said it would sell 3 million shares and the stock fell. Delivery Hero’s biggest shareholder is Prosus, a technology investor that on Tuesday made its own offer for Just Eat. Hedge fund Cat Rock Capital has called on Delivery Hero to stop the sales.

“It is imperative that any entity related to Prosus, including Delivery Hero, immediately cease market actions that interfere with the effective value provided by competing bids for the duration of the offer period,” Cat Rock, which owns shares in Takeaway and Just Eat, said in a statement Tuesday.

Cat Rock said it holds about 3% of Just Eat’s shares. The investor also holds about 5.6% of Takeaway, according to data compiled by Bloomberg, potentially giving the firm more to gain from a Takeaway deal than one with Prosus. Greenwich, Connecticut-based Cat Rock was started in 2015 by Alex Captain, a former partner at billionaire Chase Coleman’s Tiger Global Management.

A representative for Prosus said Delivery Hero is an independent business that made its own decision on the Takeaway holding. A spokeswoman for Delivery Hero has said the firm is seeking to realize gains rather than push down Takeaway’s value. Shares of Takeaway jumped 48% in the first eight months of the year. A spokesman for Delivery Hero declined to comment further Tuesday, as did a representative for Takeaway.

Takeaway’s Just Eat Bid Hit by Rival Firm

The share price slide started in early September, when a regulatory filing showed Delivery Hero had hired a bank to sell shares of Takeaway at a minimum price of 73 euros each, a 13% discount to its last close. It has since sold about 1.22 million shares, reducing its stake to 13.5%.

Prosus, a spinoff from Naspers Ltd., noted in its bid announcement Tuesday that the value of Just Eat’s bid has fallen along with its share price. It also contrasted the certainty of its own cash offer with the potential for further market volatility. Analysts had noticed the Delivery Hero sales as well, with JPMorgan Chase & Co. saying earlier this month the trades were causing a “continuous overhang” on Takeaway stock.

Just Eat shareholder Aberdeen Standard Investments said on Wednesday that the Delivery Hero share sale’s pressure on Takeaway’s stock could put the proposed deal at risk. It’s a combination it favors, saying that the Prosus offer is 20% too low and that a combination with Takeaway would create a leading European food delivery company. Aberdeen holds about 5.2% of Just Eat’s shares, according to data compiled by Bloomberg.

To be sure, the startup landscape is incestuous and investors can sometimes have interlocking holdings in the same industry. Prosus and Just Eat are both investors in iFood, a Brazilian food-delivery company.

Just Eat shares rose 1.9% to 745.80 pence at 3:20 p.m. in London on Wednesday after surging 24% following the Prosus bid on Tuesday. Takeaway gained 10 cents to 72.65 euros while Prosus shares declined 5% to 63.11 euros in Amsterdam.

--With assistance from Natalia Drozdiak, Loni Prinsloo, John Bowker, Stefan Nicola and William Canny.

To contact the reporters on this story: David Hellier in London at dhellier@bloomberg.net;Amy Thomson in London at athomson6@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, ;Dinesh Nair at dnair5@bloomberg.net, Ben Scent, Nate Lanxon

©2019 Bloomberg L.P.