(Sharecast News) - Just Eat was under pressure as it emerged that shareholder Eminence Capital, a US asset management firm, intends to vote against its planned £9bn merger with Dutch peer Takeaway.com.
The two announced last month that they had agreed the terms of a merger that would create one of the world's largest food delivery companies.
Just Eat shareholders would be entitled to receive 0.09744 new Takeaway.com shares for each of their shares. Just Eat shareholders would own around 52.2% of the company, while shareholders of Takeaway.com would own the rest.
The terms of the combination imply a value of 731p per Just Eat share based on Takeaway.com's closing price on 26 July of €83.55. This represents a premium of 15% to Just Eat's closing share price on the same day.
But Eminence - which holds a 4.4% stake in Just Eat - said on Tuesday that it plans to vote against the deal as it favours Takeaway.com.
"Eminence believes that the financial terms are grossly inadequate to JE shareholders despite a sound strategic rationale for the merger," it said in a statement.
Chief executive officer Ricky Sandler 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 favourable to TKWY shareholders and far too unfavourable to JE shareholders. Accordingly, we intend to vote against this arrangement."
Investment firm Cat Rock Capital Management, which holds a 3% stake in Just Eat, said that voting against the Takeaway.com merger "benefits no one but Just Eat's competitors".
"This merger creates a strong global leader in online food delivery with high-quality assets, world-class leadership, and a compelling valuation for a combined business with great growth potential," it said, adding that Just Eat shareholders should vote for the merger "unless a more compelling and credible counter-offer emerges".
At 1440 BST, Just Eat Shares were down 1.3% at 46.90p.