Just Eat: Second Dutch-based firm makes takeover bid for food-delivery company

Offer from Prosus comes less than three months after Just Eat announced plans to merge with Takeaway.com

Just Eat is the market leader in Britain’s rapidly expanding food delivery market but it faces increasing competition from rivals such as Deliveroo and Uber Eats (AFP/Getty)

A bidding war has broken out over Just Eat as it rejected a £4.9bn takeover offer from investment group Prosus, coming less than three months after the takeaway delivery company announced plans to merge with Takeaway.com.

Prosus, a Dutch-listed arm of South Africa’s internet group Naspers, offered 710p a share in cash for Just Eat. This is almost a fifth higher than the offer from Amsterdam-based Takeaway.com.

Still, the board of Just Eat rejected the overture from Prosus as it “significantly undervalues Just Eat and its attractive assets and prospects”, and recommended that shareholders do the same.

Just Eat is the largest food delivery company in the UK but analysts have criticised its management’s failure to capitalise on its early dominance of the rapidly growing sector, allowing nimbler rivals like Deliveroo to gain ground.

In its statement, aimed at Just Eat shareholders, Prosus said it believes the business will require substantial investment, over and above that planned by the company’s management.

“Just Eat’s third-quarter trading update demonstrated a significant slowdown in order growth, which highlights the need to accelerate this investment to sustain its competitive advantage,” it said.

“Prosus does not believe that the proposed combination with Takeaway.com will fully or effectively address this investment need.”

Just Eat and Takeaway.com face tough competition from rivals with deep pockets such as Uber Eats and Deliveroo, which is backed by Amazon.

The bid from Prosus follows a string of foreign acquisitions of British companies. Earlier this year, US toymaker Hasbro bought the UK-listed owner of Peppa Pig, while Britain’s biggest pub owner Greene King agreed to sell its entire business to CKA, a Hong Kong real estate group. Meanwhile, Fuller’s, another UK pub group, sold its brewing business to Asahi, Japan’s largest brewer.

Just Eat’s shares surged 20 per cent shortly after Prosus announced its offer and traded about 25 per cent higher on the day in the afternoon.

Neil Wilson, chief market analyst for Markets.com, said: “A bidding war is now on. You may need more like 750 pence [per share] to sort this out.”

He added that a merger or a takeover of sufficient scale would create a company with the heft to take on Deliveroo, Uber Eats and Amazon.

Prosus already has other investments in the food-delivery sector, including iFood in Latin America, Berlin-based Delivery Hero and Swiggy in India.