Activist investor Cat Rock tells Prosus not to interfere with Takeaway.com bid for Just Eat
Activist investor Cat Rock has warned investment firm Prosus not to interfere with Takeaway.com’s bid for rival food delivery service Just Eat.
Prosus launched a £4.9bn all-cash offer for Just Eat today, representing a 20 per cent premium to Takeaway.com’s all-share offer which has been negatively impacted by the Dutch businesses’ falling share price.
Read more: Bidding war on the cards as Just Eat rejects £4.9bn hostile bid from Prosus
Cat Rock, which owns shares in both Just Eat and Takeaway.com, said that the latter’s share price had been hit by share sales by German rival Delivery Hero – in which Prosus holds a major stake.
“Since 9 September, the value of Takeaway.com’s offer has been negatively impacted by open-market sales announced by Delivery Hero that have used a limit of €73 per Takeaway.com share,” Cat Rock said.
“In the 10 trading days following this announcement, Takeaway.com stock fell 13 per cent from €83.50 per share to the announced limit of €73 per share. We note that Prosus owns approximately 22 per cent of Delivery Hero’s outstanding stock and sits on the Delivery Hero board.
Read more: Top 10 Just Eat shareholder to vote against £9bn merger deal with Takeaway.com
“It is imperative that any entity related to Prosus, including Delivery Hero, immediately cease market actions that interfere with the effective value provided by competing bids for the duration of the offer period,” it said.
Prosus chief executive Bob van Dijk was asked about Delivery Hero’s sale of Takeaway.com shares during an earlier press call, but denied having any influence over the decision.
“Delivery Hero is a listed company that we don’t control,” he said, directing reporters to question the company directly about its Takeaway.com sell down.
Cat Rock was a vocal critic of Just Eat’s management prior to the Takeaway.com deal, arguing it needed to find a merger partner to survive in a cut-throat market.
Today, Cat Rock came out in support of Takeaway.com’s offer for Just Eat, criticising the Prosus offer as undervalued.
Read more: Just Eat faces pressure as Cat Rock says investors back calls for merger
Cat Rock said: “The Prosus offer underscores the significant long-term potential and strategic value of Just Eat’s business. However, unlike the Takeaway.com offer, the Prosus offer does not allow Just Eat shareholders to participate in any future value creation through the equity of the combined businesses. Prosus should share this future value creation with Just Eat shareholders by paying a fair premium.
“Based on historical transaction precedents and market multiples, Prosus should pay at least 5.0x Just Eat’s fiscal year 2020 revenue, again attributing no value to Just Eat’s valuable stake in iFood. This multiple would translate to an all-cash offer of at least 925p per share,” Cat Rock said.
“The proposed Takeaway.com merger allows Just Eat shareholders to participate in future value creation and is therefore far more attractive than the Prosus offer of 710p per share,” it added.