Daily Management Review

Its Just Eat Bid Defended By Takeaway Even Though It Is Lower Than Rival’s


12/03/2019




Its Just Eat Bid Defended By Takeaway Even Though It Is Lower Than Rival’s
The tussle between the Netherlands based company Prosus and the Dutch meal delivery firm Takeaway.com over acquisition of United Kingdom based food delivery firm Just Eat. Both the companies have put in bids for the food delivery company.
 
On Tuesday Takeaway.com said that the cash bid from rival Prosus was an attempt by the company to purchase the British company “on the cheap” while defending its $6.1 billion all-share offer for Just Eat. The bid by Prosus for Just Eat is higher than that he Takeaway.com.
 
The reason behind the confident stand about its offer for the acquisition of Just Eat despite a lower bid for the company than Prosus is its argument that the resultant entity that would be created by the merger of the two companies would be one of the largest in the industry segment in Europe and would turn out to be a dominant player with large market share in the food delivery markets of Britain, Germany and the Netherlands.
 
The offer from Prosus for Just Eat was advised to be rejected by the shareholders, the company said last week. Just Eat said that despite the lower financial bid for the company, the deal would be advantageous for both the companies because it would create the largest food delivery firm outside China.
 
While underselling the capabilities of the Just Eat-Takeaway combination to generate cash and finance investments, Prosus had shown “a lack of understanding of the sector”,, said Takeaway in a statement addressing points made by Prosus. “Prosus is trying to buy Just Eat on the cheap”, it said.
 
Takeaway’s all-share bid was worth 694 pence at 0840 GMT on Tuesday, while Prosus is offering 710 pence per share in cash - valuing the company at $6.3 billion.
 
Its offer was much superior than Takeaway’s, Prosus said on Monday and added that the if Just east chose to undertake a merger with Takeaway, the result will not be able to completely and effectively manage the needs for investments in product, technology, marketing and own delivery capabilities for Just Eat.
 
The shareholders of Just eat have been repeatedly warned in recent weeks by Prosus about the high risks that they are likely to take if they confirm the company’s merger with Takeaway.
 
Shareholders should continue to support the Takeaway deal unless Prosus raised its bid to 925 pence, Cat Rock, one of Just Eat’s prominent shareholders has argued.
 
(Source:www.nytimes.com)






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