Naspers-owned Prosus upped its bid to $6.5 billion on Monday (Dec. 9) to acquire London’s food delivery service Just Eat, putting pressure on rival buyer Takeaway, Reuters reported.
Just Eat favors Takeaway’s all-share bid, although the new cash offer from Prosus is 5 percent more. Prosus upped its offer to 740 pence per share, from 710 pence. The technology group also dropped its acceptance threshold to 50 percent plus one share, down from 75 percent.
“Unlike the Takeaway.com offer, which relies on (its) shares remaining at an above-sector multiple, our cash offer provides certainty of value to Just Eat shareholders,” Prosus CEO Bob van Dijk said in a statement.
“Shareholders are advised to take no action with regards to the increased offer at this time,” Just Eat told Reuters.
Takeaway’s CEO Jitse Groen said the latest Prosus offer was “derisory” and was 9 percent lower than Just Eat’s share price as recently as Aug. 13.
“A slightly higher derisory cash bid remains a derisory cash bid,” Groen said, urging Just Eat shareholders to accept the Takeaway offer. He added that a Takeaway and Just Eat merger would “combine our two great companies to create the largest global platform in online food delivery outside China.”
He also said the Prosus offer “significantly undervalues Just Eat” and doesn’t consider the additional value that a combined Just Eat-Takeaway.com will offer shareholders.
Investor Cat Rock owns 5.9 percent of Takeaway and 2.6 percent of Just Eat. It said Prosus should pay a minimum of 925 pence per share for Just Eat “to compensate investors for the upside they might miss in a Takeaway tie-up,” which it supports.
“This revised Prosus offer is wholly inadequate and shows Just Eat shareholders that Prosus cannot muster a credible bid,” Cat Rock told Reuters.
By Dec. 12, both bidders are expected to report “how many shares their offers have won.” If neither company prevails, an auction process will begin on Dec. 27 with Britain’s Takeover Panel.
Last month, Just Eat turned down a hostile £4.9 billion ($6.3 billion) cash bid from Prosus.