The prospect of a multibillion-pound bidding war for Just Eat sent shares in the FTSE 100-listed business surging by more than a fifth on Monday.
Just Eat agreed terms with its Dutch rival Takeaway.com in a deal that would create one of the world’s biggest online food delivery companies.
When announced, the £9bn combination valued Just Eat shares at 731p and the UK company’s share capital at £5bn.
Speculation about a rival bidder pushed Just Eat shares comfortably above the offer terms. The UK company’s shares closed up 22.7% at 780p.
Under the terms of the agreement, Just Eat shareholders would receive 0.09744 Takeaway.com shares for each Just Eat share and would own 52.2% of the combined group. It would be headquartered in Amsterdam and listed on the London Stock Exchange, with a “significant part of its operations” in the UK.
Analysts speculated there could be a counterbid, possibly from the Berlin-based Delivery Hero or the South African internet and media company Naspers.
There have been a flurry of deals in the fast-growing online food delivery market, with competition heating up from Uber Eats and Deliveroo. Just Eat bought the UK firm HungryHouse in January 2018, and in December Takeaway.com acquired Delivery Hero’s food delivery business in Germany.
Analysts at Jefferies thought the most likely counter-bidder would come from outside the industry, such as Japan’s SoftBank, Amazon or private equity.
A bid from Uber Eats or Deliveroo would raise competition issues, and these could also affect Amazon. After it became the lead investor in a $757m (£451m) financing round in Deliveroo in May, Amazon was ordered by the UK’s Competition and Markets Authority to halt any integration efforts pending an investigation into potential breaches of competition rules.
Combined, Just Eat and Takeaway.com had 360m orders worth €7.3bn in 2018 and strong positions in the UK, Germany, the Netherlands and Canada.
Under the plans, Takeaway.com’s boss, Jitse Groen, would become chief executive of the new company. It would be chaired by the Just Eat chairman, Mike Evans, while the Takeaway.com chairman, Adriaan Nühn, would be vice-chairman. The Just Eat chief financial officer, Paul Harrison, would take on the same role for the combined group, and its interim chief executive, Peter Duffy, would leave.
Groen has described the UK as one of the best three markets in Europe, along with the Netherlands and Poland. Takeaway.com was founded in 2000 and operates in 10 European countries as well as Israel and Vietnam, but it does not have a presence in the UK. The two companies have little geographical overlap apart from Switzerland.
Analysts at Barclays said: “Just Eat shareholders would be getting the best operator in the space to run the business – a notable shift from missed execution from management in the last few years.”
Just Eat has come under pressure from its activist shareholder Cat Rock Capital to merge with Takeaway.com, in which the US hedge fund also holds a stake.
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