Takeaway Seals Victory In $8bn Just Eat Battle
Online food ordering company Takeaway.com has won the battle for Just Eat with a £6.2 billion share offer that will create one of the world's largest meal delivery companies.
Takeaway said that 80.4% of Just Eat shareholders agreed to its all-share offer, passing a 50% threshold needed to make the offer unconditional.
"I am thrilled," Takeaway CEO and founder Jitse Groen said in a statement. "Just Eat Takeaway.com is a dream combination, and I am very much looking forward to leading the company for many years to come."
The merged company, which will be led by Groen, will have its headquarters in Amsterdam and a listing in London, with 23 subsidiaries, mostly in Europe, but also in Canada, Australia and Latin America.
Takeaway said that the combination will handle orders worth more than rivals including GrubHub, Delivery Hero and Uber Eats in a market where China's Meituan is the largest player by volume.
Work To Be Done
While ending a colourful takeover battle, Takeaway's victory starts the difficult task of integrating Just Eat.
As an indication, Takeaway has said that the combined company would have had sales of €1.21 billion and a loss of €43 million on a pro-forma basis in 2018, though both have registered strong sales growth in 2019.
Takeaway said that the combination will achieve annual cost savings of approximately €20 million from centralising orders on its platform, unifying brands and improving procurement.
As part of merger plans, Takeaway has said that it is likely to sell Just Eat's 33% stake in iFood, Latin America's biggest food site, including its strong Brazilian subsidiary. Prosus controls iFood.
The Fight For Acquisition
The fight to buy Just Eat began in August when Takeaway struck a management-backed deal that would give Takeaway a 48% stake in the combined company.
That plan was upended when Prosus laid down the first of three unsolicited rival bids in October. All were rejected as inadequate by Just Eat managers.
Prosus argued that Takeaway was underestimating the investment needed to fend off rivals such as Uber Eats and Amazon.com.
Groen responded that food delivery is a low-margin business and his focus was on becoming the dominant ordering platform.
The fight reached a dramatic climax on December 19 when Prosus made its final offer and Takeaway responded minutes later with a higher bid, cutting the share of the merged company that will go to its own shareholders to 42.5%.
Takeaway will have to prove that the business model it has pursued in Germany and the Netherlands, which has led to rapid sales growth and improved core earnings (EBITDA), will eventually lead to lasting profitability for the group.