By Adriano Marchese
Prosus NV on Monday raised its offer for Just Eat PLC to 5.1 billion pounds ($6.70 billion), or 740 pence a share, stepping up a bidding fight for the U.K. food-delivery company with Takeaway.com NV.
Prosus, an Amsterdam-listed company /zigman2/quotes/214038022/delayed NL:PRX -0.65% which was spun out of South African investor Naspers Ltd. /zigman2/quotes/205954517/delayed ZA:NPN +5.12% earlier this year and is best known for housing a major stake in Chinese tech giant Tencent Holdings Ltd. /zigman2/quotes/204605823/delayed HK:700 +0.10% , also lowered the level of acceptances required for the offer to proceed to a simple majority, from 75% previously.
The move by Prosus heats up the battle for control of a company that has been under pressure from startups with deep-pocketed backers like Deliveroo--which counts Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +0.66% as one of its biggest investors--and Uber Technologies Inc.’s /zigman2/quotes/211348248/composite UBER -0.60% meal-delivery arm Uber Eats.
The new offer represents a 4.2% increase on Prosus’s latest offer of 710 pence a share, which was rejected by Just Eat’s board, and comes at a premium to the value of Takeaway’s agreed offer when it was announced in July. However, the bid is still below Just Eat’s current share price. Just Eat shares at 1058 GMT traded 0.7% higher at 782.40 pence.
Prosus said it raised the offer after listening to Just Eat shareholders’ views and following discussions with its own shareholders. The new proposal gives Just Eat investors certainty of value while allowing Prosus to target appropriate returns for its shareholders, the company said.
“We believe the investment required is substantial and this impacts our view of potential returns. As disciplined investors we obviously need to factor the required investment into our value considerations,” Prosus Chief Executive Bob van Dijk said.
Just Eat said its board is currently reviewing the increased offer, but advised shareholders to take no action at this time.
Takeaway’s all-stock proposal, which has been recommended by Just Eat’s board, valued the U.K. company at 731 pence a share based on the Dutch company’s share price of 83.55 euros ($92.37) on the last day before the deal was first disclosed in July, but its value has declined since then due to a fall in Takeaway’s share price.
Takeaway urged Just Eat shareholders to back its proposed merger with the U.K. company and ignore Prosus’s revised bid, which it called “opportunistic and derisory.”
U.S. investor Cat Rock Capital Management LP, which holds stakes in both Just Eat and Takeaway, said Prosus’s revised offer continues to undervalue the U.K. company and that its bid should be raised at least to 925 pence a share to compete with a Takeaway merger.
“Prosus is struggling to pay a fair price for Just Eat because it lacks a credible plan for winning in the U.K. Throwing money at the market under existing management is not a credible plan,” Cat Rock Managing Partner and founder Alex Captain said.