Naspers, the South African digital business conglomerate, has stepped up its bid to snatch London-listed food delivery app Just Eat from under the nose of its other major suitor, Takeaway.com. A new bid for Just Eat, reported today by the Financial Times as worth “just over” £5 billion, is set to be made. Naspers hopes the new valuation will finally convince Just Eat’s board and shareholders.
Naspers, through is Amsterdam-listed investment arm Prosus, announced today that, after “extensive discussions” with major Just Eat investors, it has raised its previous offer by 30p a share to 740p. That takes the overall offer price to beyond the £5 billion level. The new move comes after the failure of a hostile takeover bid launched in October after Dutch peer Takeaway.com, which is a market leader in the food delivery app market in central and east Europe, had made an all-share offer for Just Eat. However, with Takeaway.com’s deal valuing Just Eat at just 594p a share, it also failed to convince.
Prosus’s statement today read:
“Prosus believes that its initial offer to Just Eat Shareholders provided fair and certain value. The increased offer provides even more compelling and certain value for Just Eat’s Shareholders at a further premium to Takeaway.com’s all-share offer, which comes with significant risk.”
In addition to the increased offer, Prosus has also reduced the level of acceptance for its offer to a threshold of 75% of Just Eat shares. It remains to be seen how Just Eat’s board will react to the new bid, having quickly dismissed the first offer with the retort that it significantly undervalued the group. It has, however, previously recommended Takeaway.com’s all-share offer to investors.
In addition to offering what it believes is both a more financially attractive and ‘certain’ offer to Takeaway.com’s all-share bid, the value of which would be contingent on the future performance of the combined group, Prosus has also pitched investors with its financial muscle. The company has told investors it has greater resources to which it can devote to defending Just Eat against increasing competition in what is a low margin business model. Bob van Dijk, chief executive of both Prosus and parent company Naspers commented:
“Just Eat is a quality business, which we believe has all the ingredients to be transformed into a long-term sector winner. In recognition of this potential, we have decided to increase our offer to 740 pence per share, which we believe provides Just Eat Shareholders with compelling value and therefore good reason to accept our all-cash offer.”
Investors have today reacted with relative indifference to the increased bid from Prosus. Just Eat’s share price gained just 0.46% over Monday trading.