(Alliance News) - Just Eat PLC said Monday it is reviewing the increased takeover offer from Prosus NV and is advising shareholders to hold off on accepting the offer for now.
Just Eat also noted Takeaway.com NV has published a circular to Just Eat shareholders regarding the agreed all-share merger between the two.
Prosus, earlier on Monday, increased its offer for London-listed Just Eat to 740 pence per share, giving Just Eat a value of GBP5.1 billion.
The all-cash offer represents a 26% premium to Just Eat's closing price on October 21, the day before Prosus's first bid for the company.
Internet and media firm Prosus, which was recently spun-off from South African media giant Naspers Ltd, launched a 710p per share, or GBP4.9 billion, cash bid for FTSE 100 takeaway platform Just Eat back in October. That offer was rejected.
This was after Takeaway.com and Just Eat agreed to an all-share merger in July, under which Just Eat shareholders would get 0.09744 of a Takeaway.com share for each Just Eat share held, implying a value for Just Eat at 731 pence per share.
Prosus and Takeaway have been engaged in a war of words since Prosus stepped in, as they battle it out to acquire Just Eat.
Also on Monday, Prosus said it has lowered the required level of acceptances for its ofer to 50%, and extended the closing date to accept the offer to December 27.
Prosus Chief Executive Bob van Dijk said: "Following the announcement of our offer, we have had the opportunity to listen to the views of Just Eat shareholders, share our perspective on the global food delivery sector and reflect on the unquestionable challenges Just Eat faces, as clearly seen in its third quarter results. We have also had extensive discussions with our own shareholders with regards to our long-term strategy for food delivery and Just Eat's role within that."
Prosus believes Just Eat is an "attractive business with strong long-term potential" but is facing "significant challenges".
"Just Eat's historically strong market positions are being eroded by intensifying competition in the UK and other core markets, including Spain and Italy, with market share loss recently accelerating in a number of markets," Prosus added.
Prosus believes Just Eat has "underinvested" in addressing these problems. The company also believes the Takeaway.com offer "carries significant risk" and Takeaway.com "takes a narrow view of the food delivery sector".
Van Dijk added: "We continue to believe in the sector and, as we have demonstrated in Brazil, if you act decisively and invest effectively in technology as well as the opportunities of own-delivery, then you can build an attractive growth business that is equipped to win in the long-term. 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."
Takeaway.com on Monday urged shareholders to accept its offer, saying it is "far superior" to the "derisory cash offer" from Prosus.
"Together, we have the opportunity to combine two fantastic companies with huge growth potential. Our Takeaway.com offer provides you with the opportunity to benefit from significant long-term value creation from the Just Eat Takeaway.com combination. We encourage you to join us on our journey and accept the Takeaway.com offer without delay," said Takeaway.com Founder & Chief Executive Jitse Groen.
Shares in Prosus were up 0.4% in Johannesburg on Monday at ZAR969.67 each. Naspers was marginally higher at ZAR2,055.77. Just Eat was up 0.7% in London at 782.60 pence, giving it a 5.35 billion market capitalisation.
By Paul McGowan; paulmcgowan@alliancenews.com
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