Dutch giant online food delivery group Takeway.com has won the battle over London Stock Exchange-traded Just Eat Plc with a Â£5.9bn all-share merger.
In an exchange filing made by Just Eat Plc as on January 10, 2020, the group reported that Takeaway.com has received valid acceptance in respect of 549,231,901 outstanding shares of the Just Eat Plc (LON: JE.), which represents approximately 80.4% of the share capital of the company.
This proposed merger will create one of the world's biggest food delivery entity. The merged entities will be led by Netherlands-based Takeaway.com's chief executive Juste Groen, with headquarters in the Netherlands while its shares will trade on the London Stock Exchange, with 23 subsidiaries across Europe.
Takeaway.com was bidding for Just Eat Plc in competition with the tech investment firm Prosus N.V. However, after Takeaway.com won the takeover battle, the latter stated that Takeaway was underestimating the investment needed to sustain against the competitors like Uber Eats and Amazon.com.
The chief of Prosus N.V., Bob van Dijk said that "we have proven track record of executing mergers & accusations at the fair prices for our shareholders and of garnering solid returnsâ. The company didnât want to acquire Just Eat Plc at any cost, and it believed that its final offer of GBX 800/share was intended to preserve its ability to create value for its shareholders.
Takeaway's bid was worth GBX 889/share at the latest close, surpassing a bid from rival Prosus of GBX 800/share,
Takeaway chief Jitse Groen said that "I am thrilled and combination of Just Eat Plc and Takeaway.com is a dream combination. I am very much looking forward to leading the merged entity for many years to come."
Takeaway.com initiated its bid to acquire in July 2019 and proposed to pay for the acquisition through its own shares. But in October 2019, Netherland-headquartered tech investment firm Prosus N.V. tried to sabotage the ongoing negotiations with its own uninvited cash bid of $6.3bn. Later, Prosus N.V. proposed a further round of two bids but the board of Just Eat Plc backed Takeaway.comâs offer from the beginning.
The proposed GBX 889/share all-share merger between Just Eat Plc and Takeaway.com is expected to materialise in the first quarter of 2020.
In the January 10, 2020 trading session, the Just Eat Plc's shares traded 13.80 points or 1.53% lower at GBX 887.20 at 11:54 AM GMT, and during the day trading its shares registered an intraday high of GBX 902.20 and a low of GBX 884.60, respectively. The stock ended the January 10, 2020 trading session at GBX 901.0. However, the final takeover price for the proposed all-share merger between Takeaway.com and Just Eat Plc was exercised at GBX 889/-, which was a 1.3% discount to the January 10, 2020 closing price.
Just Eat Plc is a market leader in the UK's fastest expanding food delivery market but was witnessing strong competition from peers like Deliveroo and Uber Eats. However, the proposed merger carry potential to weigh heavily on other sector competitors. Also, Takeaway.com has expanded in the same manner in its home market of the Netherlands and Germany and was always in the race to become a global giant player of the food delivery industry.
The Â£6.15bn market-cap of Just Eat Plc ranks it among the large-caps listed and traded on the London Stock Exchange and also a constituent of the UK broader equity index FTSE 100. In the third quarter (Q3FY19), the groupâs revenue grew by 25% to Â£247.5m. Also, the Board of the group remained confident in the groupâs current performance and reconfirmed its full-year 2019 revenue guidance in between Â£1.0bn to Â£1.1bn and earnings before interest, tax and depreciation (EBITDA) (excluding Brazil and Mexico) Â to be in the range of Â£185m to Â£205m.
However, in between FY15 to FY18, the groupâs revenue surged from Â£248m in FY15 to Â£780m in FY18 and recorded a massive compounded revenue growth rate of 47% p.a and on a YoY basis, the group's revenue surged above 40% every year during the same period. The group's operating profit during the period under consideration has also leapt up with a CAGR of approximately 41%. However, YoY growth in the same period was extremely volatile.
Since listing of Just Eat Plcâs shares as on April 08, 2014, its shares have delivered a price return of 220% in absolute terms. However, over the past five-years, its shares have delivered a compounded average growth rate (CAGR) return of 22% against 3.0% CAGR return handed by the broader index of the UK âthe FTSE 100 indexâ. This was largely driven by aggressive top-line growth it recorded since its listing in April 2014.
In the year-over period, its shares have delivered a price-return of 43% and surged more than 45% in the past three months, up approximately 16% in a month-over period and bagged around 4% in the last five trading sessions.
In the past 52-week, its share has touched a peak of GBX 910.80 (as on January 10, 2020) and a bottom of GBX 574.40 (as on October 21, 2019), while at the current level as mentioned above in the article, its shares traded approximately 2% lower from those 52-week high levels.
Also, at the current level, its stocks traded well above its crucial long-term and shp0rt-term support levels of 200-day and 50-day Simple Moving Average (SMAs), which is typically perceived to be a positive technical trend for the stock.