Takeaway Wins Bidding War for Just Eat With $8 Billion Offer
Takeaway Wins Bidding War for Just Eat With $8 Billion Offer
(Bloomberg) --
Takeaway.com NV has won a months-long bidding war for Just Eat Plc, ending a contentious battle with Prosus NV and creating Europe’s largest food-delivery operation at a time of heightened competition in the industry.
Just Eat investors holding 80.4% of its shares have formally backed Takeaway’s all-stock bid, which values the company at about 6.1 billion pounds ($8 billion), Amsterdam-based Takeaway said Friday, confirming an earlier Bloomberg report.
The new venture, which currently has a combined market value of about $14 billion, will merge two European food delivery companies at a time of heightened competition in the industry, with rivals such as Uber Technologies Inc. facing off for a share of the fast-growing sector.
Following completion of the merger, Takeaway has pledged to explore exiting Just Eat’s 33% stake in Brazil’s iFood, in which Prosus also invested. Takeaway has said it will return about 50% of the net proceeds to shareholders of the combined group.
The new company, based in Amsterdam and listed in London, will be called Just Eat Takeaway NV and be the biggest of its kind in Europe. A key battleground will be the U.K., with Uber Eats and Deliveroo investing heavily in the country and expanding from the logistics of delivery -- getting the food from the restaurant to your door -- to launching rival marketplace platforms that concentrate on aggregating available eateries for users.
Takeaway’s victory also means it is buying back it’s first attempt at cracking the U.K. market. It launched in the country in 2012, but sold the business four years later to Just Eat, after struggling with growth.
Food Fight
Following Friday’s announcement, Prosus CEO Bob van Dijk said the company would pursue other alternatives.
“Just Eat is not an acquisition we wanted to make at any cost” he said. “While we have significant financial capacity we believe that our final offer of 800 pence per share was appropriate in light of the investment required.”
Takeaway Chief Executive Officer Jitse Groen, who will lead the new company, was publicly irritated by the Prosus challenge. When asked about whether he’d have to raise his offer at an industry conference in November, he said “I don’t want to be the idiot that runs into a ratio that doesn’t make any sense.”
But after a rejection from Just Eat, Prosus publicly raised its bid twice before Takeaway announced its final offer in December, valued at about 916 pence per share at the time.
Prosus had argued it has the resources to make the significant investments in Just Eat necessary for it to stay competitive. But Takeaway’s proposal ultimately won support from shareholders including Aberdeen Standard Investments, which said the stock deal would let it maintain exposure to the fast-growing online food delivery market. Just Eat holders will own 57.5% of the combined entity.
Deal Wave
The battle between Prosus and Takeaway is one front in larger, sometimes messy, attempts to consolidate the food-delivery industry. Competition in many markets is fierce and profitability is elusive. London-based Just Eat reported an 8.8 million pound net loss in the first half of the year. Takeaway reported a 37.4 million-euro ($41.5 million) loss for the period.
Grubhub Inc. put out a statement Thursday that it “unequivocally” isn’t running a sale process, following media reports that it was considering a potential sale. Still, the reports spurred calls for consolidation from analysts.
Amazon.com Inc.’s attempt to purchase a minority stake in U.K. delivery startup Deliveroo has drawn unexpected scrutiny from antitrust regulators and the $500 million deal faces an in-depth investigation from the Competition and Markets Authority.
Takeaway spent about $1 billion for the German operations of rival Delivery Hero SE in a deal announced in late 2018. Delivery Hero announced last month that it would take control of South Korea’s biggest food delivery app Woowa Brothers Corp., at a $4 billion valuation. Spanish food delivery startup Glovo has drawn preliminary interest from Uber and Deliveroo, people familiar with the matter had said.
The deal activity has also led to overlapping ownership stakes, which caused controversy in the Just Eat deal. Prosus was the largest shareholder in Delivery Hero, which was one of the biggest investors in rival bidder Takeaway.
To contact the reporters on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net;David Hellier in London at dhellier@bloomberg.net
To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Amy Thomson
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