Naspers spin-off Prosus has raised its bid for UK food delivery firm Just Eat as it tries to win over investors and beat out an offer from rival Takeaway.com.
The technology investment company increased its cash offer to £7.40/share, valuing Just Eat at about £5.1-billion (R98.4-billion), Prosus said in a statement on Monday.
Just Eat’s management has been encouraging investors to vote for Takeaway’s all-share deal, which would give them scale and access to Takeaway’s technology, arguing that Prosus’s offer undervalued the company even as a slide in Takeaway’s share price pushed down the value of its all-stock offer. As of Friday, after a month-long rally, Takeaway’s bid valued Just Eat shares at £7.10 each.
A spokesman for Takeaway.com declined to comment. A spokesman for Just Eat didn’t immediately respond for comment.
Investors have been holding out for more. Just Eat’s shares have been trading above both offers. The stock closed at £7.77 on Friday.
Aberdeen Standard Investments, which holds about 5% of Just Eat, said previously that Prosus needs to increase its offer by 20%. The investor also wanted Takeaway to increase its bid. Eminence Capital, which holds about 4%, in September said Takeaway’s bid undervalued Just Eat and that it planned to vote against that deal.
Cat Rock Capital Management, which owns shares in both Takeaway and Just Eat, has been lobbying Just Eat holders to take the Takeaway deal and has said that the combination would create a company worth £12/share by the end of next year.
Prosus, a US$108-billion technology investment vehicle spun out of South Africa’s Naspers in September, announced a hostile bid in October for Just Eat, challenging the offer from Takeaway that was due to go through by the end of the year.
Takeaway has so far pushed back against increasing its bid for Just Eat. “I don’t want to be the idiot that runs into a ratio that doesn’t make any sense,” Jitse Groen, Takeaway’s CEO and founder said in November. — Reported by Amy Thomson, (c) 2019 Bloomberg LP