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press release

Sept. 3, 2019, 2:00 a.m. EDT

Eminence Capital Intends to Vote Against Proposed Just Eat and Takeaway.com Merger

Believes Merger Terms Substantially Undervalue Just Eat’s Portfolio of Assets

Eminence Capital, LP (“Eminence”), the beneficial owner of approximately 30 million ordinary shares of Just Eat plc ("Just Eat" or "JE") (lon:JE), representing 4.4% of Just Eat’s outstanding shares, announced today that it intends to vote against the proposed merger between JE and Takeaway.com NV ("Takeaway" or "TKWY") (ams:TKWY). Eminence believes that the financial terms are grossly inadequate to JE shareholders despite a sound strategic rationale for the merger.

Eminence has carefully evaluated the terms of the merger and the financial projections and believes the proposed merger grossly undervalues JE’s strong portfolio of assets. Here are the facts:

  • Under the proposed “merger of equals”, JE shareholders would own approximately 52% of the equity in the newly combined company (the “Combined Group”), despite JE’s contribution to the Combined Group being approximately 70% towards both: i) estimated 2020 revenue and ii) estimated 2020 gross profit.

  • These numbers EXCLUDE iFood, a highly strategic non-consolidated asset, in which JE owns a 33% equity stake. iFood is Brazil’s dominant food/delivery marketplace, a highly coveted asset given penetration rates and growth potential in Brazil. iFood is 17x larger than its nearest competitor in Brazil and grew orders by 122% year-over-year in the first half of 2019 with accelerating growth throughout the second quarter. TKWY owns no such non-consolidated asset.

  • When adjusting for the value of iFood, the proposed financial terms of this merger value TKWY’s revenue and gross profits at approximately 2.9x and 2.5x the level of JE’s revenue and gross profits, respectively. Based on TKWY’s closing price prior to the deal’s announcement, JE’s 2020 revenue and gross profits were valued at 3.3x and 5.2x, respectively, compared to TKWY’s at 9.7x and 12.8x, respectively.

Notably, from the time TKWY went public in September 2016 through May 2018, JE and TKWY traded at very similar multiples of revenue. Only in the last 15 months has the valuation spread between these companies expanded in the public markets. The trend accelerated after the departure of JE’s CEO, Peter Plumb, in January 2019 – a vacancy that the JE Board has failed to fill. Over the year prior to the deal announcement, TKWY’s stock was up 48%, while JE’s was down 28%.

Ricky Sandler, Chief Executive Officer and Chief Investment Officer of Eminence, said, “It is clear to us that TKWY’s offer of a 15% premium to JE’s closing price on July 26 is highly opportunistic. We believe that a valuation disparity of this degree is unprecedented in similar transactions over the past decade and represents a gross undervaluation of JE’s strong portfolio of marketplace assets.

“While we are strong believers in the value of scale and market diversity within the food marketplace/delivery industry and have found the industrial logic of this merger to be sound, the proposed financial terms are far too favorable to TKWY shareholders and far too unfavorable to JE shareholders. Accordingly, we intend to vote against this arrangement.”

About Eminence Capital, LP

Eminence Capital, LP (“Eminence”) is a global asset management firm founded in 1999 that currently manages approximately $7.2 billion. Eminence’s investment approach is anchored in bottom up fundamental research seeking to identify “quality value” investment opportunities that the team expects will undergo a positive change in investor perception.


This material is for general informational purposes only. The material in this press release is not intended to be relied upon as investment advice and the discussion of securities herein should not be viewed as a recommendation to buy, sell or hold any particular security. The opinions expressed herein are those of Eminence as of September 3, 2019 and are subject to change at any time due to changes in market or economic conditions.

The information and opinions contained in this press release are derived from proprietary and non-proprietary sources deemed by Eminence to be reliable and are not necessarily all inclusive. Eminence does not guarantee the accuracy or completeness of this information. All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are “forward-looking statements,” which are not guarantees of future performance or results, and the words “believe” and “estimate” and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained in this press release that are not historical facts are based on current expectations, speak only as of the date of this press release and involve risks that may cause the actual results to be materially different. There is no guarantee that any forecasts made will come to pass and reliance upon information in this material is at the sole discretion of the reader. Eminence disclaims any obligation to update the information herein and reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. Past performance is not indicative of future results.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190902005287/en/

SOURCE: Eminence Capital, LP

Jonathan Gasthalter/Grace Cartwright
Gasthalter & Co.
(212) 257-4170

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