Prosus sweetens offer for Just Eat to £5.1bn

Prosus sweetened its offer for online food delivery firm Just Eat on Monday to £5.1bn from £4.9bn.

Amsterdam-listed Prosus, which was spun off from South African conglomerate Naspers, upped the cash bid from 710p a share to 740p a share. This is a 25.6% premium to the closing share price of Just Eat on 21st October, which was the last day before the initial offer announcement. Prosus had also made two previous offers of 670p and 700p a share.

Just Eat said in a statement that it was "currently reviewing the increased offer".

Prosus chief executive officer Bob van Dijk said: "Just Eat is a quality business, which we believe has all the ingredients to be transformed into a long-term sector winner. In recognition of this potential, we have decided to increase our offer to 740 pence per share, which we believe provides Just Eat Shareholders with compelling value and therefore good reason to accept our all-cash offer.

"Unlike the Takeaway.com offer, which relies on shares remaining at an above sector multiple, our cash offer provides certainty of value to Just Eat Shareholders. We urge shareholders to accept our offer, as it is the only one that delivers certainty in the face of undeniable industry change."

Prosus also said that it had lowered the acceptance threshold for Just Eat to 50% from 75% and extended the offer period to 27 December.

Just Eat announced in August that it had agreed an all-share merger with Amsterdam-listed Takeaway.com.

Just Eat shareholder Cat Rock Capital Management, which owns a 3% stake in the company, said Prosus "continues to dramatically undervalue" the company with its revised offer.

"This revised Prosus offer is wholly inadequate and shows Just Eat shareholders that Prosus cannot muster a credible bid," said Alex Captain, founder and managing partner of Cat Rock.

"We think a Prosus cash bid needs to be at least 5.0x 2020 consensus revenue, or 925p per share, in order to compete with a Takeaway.com merger that we believe could comfortably be worth 1,200p per share by the end of 2020 (more than 50% return from current Just Eat trading levels).

"Now that Prosus has shown its hand, we urge shareholders to accept the Takeaway.com offer that has been unanimously recommended by the Just Eat Board."

At 1500 GMT, Just Eat shares were up 0.5% at 781p.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "This fuels the love triangle, as merger terms with Takeaway.com had already been agreed.

"Prosus’ new offer still might not be enough to tempt Just Eat and its shareholders, and either way, whoever wins the day will still have a challenge ahead of them. The food delivery market is an increasingly crowded space, including Uber Eats and Deliveroo among others to contend with.

"Prosus’ offer update claims to be the only option that would deliver certainty in the face of industry disruption, but it’s time to see if Takeaway.com has anything new to put on the menu."