Domino’s Pizza: Eurasia shareholders reject takeover offer from Jubilant Food
The majority of shareholders at Domino’s Pizza Eurasia have said they will not accept a takeover offer from Jubilant Food Works, on the grounds that it undervalues the company.
London-listed DP Eurasia is the master franchisee for Domino’s Pizza in Turkey, Azerbaijan and Georgia, while Jubilant is the master franchisee for the chain in India.
Earlier this month, Jubilant increased its stake in DP Eurasia from 49 per cent to 53.5 per cent, which according to the company’s articles of association triggers a mandatory takeover proposal.
Jubilant requires a 75 per cent shareholding to delist DP Eurasia.
Initially, the firm tried to take the company private at 85p per share and then hiked the offer by 10p.
DP Eurasia has rejected the offer both times on the grounds that it undervalued the company. Shareholders have now said they are in agreement with this.
A statement from DP Eurasia: “There is unanimous agreement from these shareholders for the company to confirm publicly that none of them currently intend to accept the revised offer.
“As long as this status quo is maintained, Jubilant Foodworks cannot, without the support of these shareholders, de-list the company or put in place any of the mechanisms to squeeze out the minority shareholders set out in its offer document.”
DP Eurasia is understood to be open to takeover but wants the firm to increase its offer price.
The fast food chain has performed well in recent months, with an analyst note from its financial adviser Liberum showing system sales up 133 per cent in the last four months.
“Sales are now trending ahead of inflation suggesting strong volume growth,” Wayne Brown, analyst at the firm said.
He explained: “The drivers of this growth have been strong value-led innovation, store openings being on track and a strong online performance. While guidance has been maintained (having upgraded post the interims) any continuation of the current run-rate bodes well the January update.”
DP Eurasia reported a 30 per cent jump in like-for-like sales in the 10 months to October, as the group was bolstered by the opening of 41 new stores in Turkey.
The company’s share price grew over two per cent this morning as the London market responded to the news.