London food delivery service Just Eat turned down a $6.2 billion offer from Amsterdam investment firm Prosus, the Associated Press (AP) reported on Tuesday (Oct. 22).
Just Eat’s board “unanimously recommends that shareholders reject the Prosus offer,” the company told AP.
The public offer to buy Just Eat is the first big investment initiative by Naspers chief executive officer (CEO) Bob van Dijk since the company launched Prosus in September. Prosus is valued at $120 billion and has a 31 percent interest in the Chinese technology conglomerate Tencent, China’s most valuable public company.
Prosus has stakes in several food delivery companies, including iFood in Latin America, Swiggy in India, and Delivery Hero in Europe.
Van Dijk told Reuters he made a public bid for Just Eat so shareholders would have a chance to ponder a higher offer.
“We don’t believe we’re going hostile,” he said. “We haven’t been able to agree on a proposal, but we believe that shareholders will find this offer attractive.”
Just Eat, however, said the cash offer “significantly undervalues” it.
“We think our bid is better as it gives shareholders of Just Eat the opportunity to benefit from the advantages of our merger,” a Takeaway spokesman told Reuters. “We also offer shareholders more certainty.”
The proposed merger between Takeaway and Just Eat — called Just Eat Takeaway — would create one of the biggest food delivery groups outside China, with leadership in Britain, Germany, the Netherlands and Canada.
The food delivery market is worth $100 billion all around the world, and rivals like Deliveroo and Uber Eats have some of the most name recognition and market share, so the new company wants to place itself in a position where it can compete.