Takeaway.com has won a months-long bidding war for Just Eat, ending a contentious battle with the Naspers spin-off Prosus 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 ($R114-billion), Amsterdam-based Takeaway said on Friday.
The new venture, which currently has a combined market value of about US$14-billion, will merge two European food delivery companies at a time of heightened competition in the industry, with rivals such as Uber Technologies 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 and be the biggest of its kind in Europe. A key battleground will be the UK, 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 its first attempt at cracking the UK market. It launched in the country in 2012, but sold the business four years later to Just Eat, after struggling with growth.
Swooped in
The Dutch firm announced an all-stock bid for Just Eat in late July valuing the British company at about £7.31/share, or £5-billion. Prosus, a spin-off from South African media giant Naspers, swooped in with a hostile cash offer in October, sparking the bidding war.
Takeaway CEO 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 £9.16/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.
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 net loss in the first half of the year. Takeaway reported a €37.4-million loss for the period.
Grubhub issued a statement on 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’s attempt to purchase a minority stake in UK delivery start-up 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 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 at a $4-billion valuation. Spanish food delivery start-up 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. — Reported by Natalia Drozdiak and David Hellier, (c) 2020 Bloomberg LP
