Naspers in R93-billion hostile bid for UK-listed Just Eat

Naspers spin-off, Netherlands-listed Prosus, is making an audacious, R93.5-billion hostile bid to buy London-listed Just Eat.

The move is an attempt to disrupt an earlier-announced planned acquisition of Just Eat by rival Takeaway.com.

The all-cash Prosus offer, worth £4.9-billion, is being made through Prosus’s wholly-owned indirect subsidiary MIH Food Delivery Holdings.

“Prosus has recently approached the board of directors of Just Eat with a number of indicative proposals to acquire Just Eat,” Prosus said in a statement on Tuesday.

“Prosus and the Just Eat board have not managed to reach agreement. Consequently, Prosus is making this announcement in order to give Just Eat shareholders the opportunity to consider the offer.”

Under the terms of the offer, Just Eat shareholders will receive £7.10 in cash for each Just Eat share, Prosus said. The offer represents a premium of 20% to the value of the Takeaway.com offer of £5.94 per Just Eat share based on Takeaway.com’s closing price on 21 October.

Just Eat shares jumped as much as 24% on the news in London on Tuesday, the most since July, when Just Eat agreed to sell itself to Takeaway.

Takeaway bid ‘grossly inadequate’

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”.

The Prosus bid follows a Just Eat statement on Monday that its UK order growth had slowed in the third quarter, to 8% — compared to 11% for the period before. Its guidance for the full-year remains unchanged, the company said, and expects revenue of as much as £1.1-billion.

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

Prosus was listed in Amsterdam in September, a technology-investment business spun out of Naspers. Naspers expanded through acquisition around the world since turning a US$32-million investment in Chinese giant Tencent into a stake currently worth about $110-billion. The Cape Town-based company focuses on e-commerce companies, with a particular interest in online food delivery, payments and travel booking.

Naspers listed its Internet assets including Tencent in Amsterdam last month and still owns 73% of the new company, called Prosus.

“Having had access to, and reviewed, certain due diligence information made available by Just Eat … Prosus believes that the terms of its all-cash offer provide certainty and compelling value for Just Eat shareholders,” it said.

According to Prosus, Just Eat operates a global marketplace for food delivery operating across 13 markets.

“Just Eat has leading market positions in many of these markets, with a history of profitable growth driven largely by its best-in-class marketplace model. We understand that Just Eat management considers growing its own delivery proposition an important part of their strategy for the business.

‘Significant slowdown’

“Based on Prosus’s global experience and having met Just Eat management and reviewed the information provided, Prosus believes that the business will require substantial investment, in excess of that planned by Just Eat management. Prosus believes that this investment is required to enhance product, technology and own delivery capabilities in order to maintain its growth and defend its market positions in the face of intense competition.

“Just Eat’s third quarter trading update demonstrated a significant slowdown in order growth, which highlights the need to accelerate this investment to sustain its competitive advantage.

“Prosus does not believe that the proposed combination with Takeaway.com will fully or effectively address this investment need.”

Prosus regards food delivery as a big future growth driver. It has a portfolio of food delivery businesses and investments, including iFood, Delivery Hero and Swiggy.

It said the offer for Just Eat is “an important step towards achieving Prosus’s ambition to build the world’s leading food delivery business and the next logical step for the longstanding, successful iFood investment partnership between Prosus and Just Eat in Latin America.”  — (c) 2019 NewsCentral Media, with additional reporting by Amy Thomson, Natalia Drozdiak, Janice Kew and Loni Prinsloo, (c) 2019 Bloomberg LP