The South African firm hoping to derail Just Eat’s merger with rival Takeaway.com is planning to invest hundreds of millions of pounds into the delivery firm in a bid to take on Deliveroo.
Prosus, the Dutch division of tech conglomerate Naspers, last week tabled an audacious £4.9bn takeover bid for Just Eat, sparking a furious bidding war.
Just Eat’s board rejected the unsolicited cash bid in favour of an all-share merger agreed in July with Takeaway.com, which offered 731p per share. However, a decline in Takeaway.com’s share price means the deal is now worth roughly 594p per share.
Prosus has described its own bid as a “full and fair price” and has pledged hefty investment in the takeaway company in a bid to win round investors.
Boss Bob van Dijk said the Takeaway.com deal would fail to provide Just Eat with the investment it needed to pose a challenge to rivals Deliveroo and Uber Eats, and said his firm’s offer “reflects the investment that is needed”.
“We believe a cash offer at a 20 per cent premium is better than an all-share offer,” he said. “It provides certainty to shareholders and shields them from operational execution risk.”
Prosus said it would focus its investment on additional drivers so that it can offer more choice to consumers.
While Just Eat has its own drivers, the platform functions primarily as a marketplace, often requiring restaurants to carry out the delivery themselves. By ramping up its roster of drivers, Prosus said, the firm could expand its offering to cover even more eateries.
However, the gatecrasher’s bolshy bid has so far failed to charm institutional investors, with Aberdeen Standard saying Prosus’s offer “significantly undervalued” the company.
Activist investor Cat Rock, which owns shares in both Just Eat and Takeaway.com, also rejected the bid.
Analysts have cast doubt on whether investors would accept Prosus’s “low-ball” offer, but said it could force Takeaway.com into raising its own bid.
The ongoing bidding war has given a boost to Just Eat’s shares, which have risen almost a fifth in the last week.
Main image credit: Getty