October 28, 2019 / 11:30 AM / 21 days ago

Shareholders trade barbs as Just Eat takeover battle simmers

AMSTERDAM (Reuters) - The takeover battle for British food delivery ordering service Just Eat (JE.L) heated up on Monday as a key shareholder accused German peer Delivery Hero (DHER.DE) of undermining one of the two rival offers.

FILE PHOTO: Signage for Just Eat is seen on the window of a restaurant in London, Britain, August 5, 2019. REUTERS/Toby Melville/File Photo

Takeaway.com and internet giant Prosus PRX.AS, both based in the Netherlands, are vying to buy Just Eat, with Prosus last week unveiling an unsolicited $6.3 billion (£4.90 billion) offer in cash, or 710 pence per share. Just Eat, which had already agreed in August to an all-share offer from Takeaway, rejected the new bid.

However, a slide in the value of Takeaway’s shares since Aug. 30 has reduced the value of the Takeaway bid from an original 731 pence a share to 594 pence.

German food delivery company Delivery Hero finds itself tangled up in the battle because it is part owned by Prosus and is, in turn, an investor in Takeaway.

Just Eat shareholder Cat Rock on Monday accused Delivery Hero, which is 22% owned by Prosus, of selling down its 13% stake in Takeaway shares to keep them artificially suppressed and lower the attractiveness of Takeaway’s offer.

“Delivery Hero structured its share sales in a bizarre and uneconomic fashion that seems deliberately intended to depress Takeaway.com’s stock price in the run-up to the shareholder vote on a merger with Just Eat,” Cat Rock said. The vote is scheduled for Dec. 4.

Delivery Hero said it “categorically” rejected the claim.

“The decision to sell down Takeaway.com shares was taken by Delivery Hero’s management board independently in September 2019,” its statement said.

“Delivery Hero had no knowledge of Prosus’s contemplated offer to acquire Just Eat.”

Before Prosus’s bid was announced, Delivery Hero had detailed plans to sell 3 million of its 8 million shares in Takeaway.

OFFER PREMIUM

Prosus, spun off last month from South Africa’s Naspers (NPNJn.J), issued a statement saying it had no hand in Delivery Hero’s decision to sell Takeaway shares and had not revealed its plan ahead of time to Delivery Hero.

Prosus “does not control Delivery Hero or its investment decisions”, it said.

It said it hopes to “engage with shareholders to discuss the merits of its offer”, noting that it was at a 20% premium to Just Eat’s share price of 589p the day before it announced its interest.

“In our view, this price reflected the market’s disappointment in the continued weak performance of the business,” Prosus added, pointing to Just Eat’s third-quarter earnings.

Just Eat shares closed little changed at 761p on Monday, having soared 24% when the Prosus offer emerged last week.

Separately on Monday, Takeaway demanded that Delivery Hero (DHER.DE) should not vote on Dec. 4 either for or against Takeaway’s offer, saying Delivery Hero had a conflict of interest given its ownership.

FILE PHOTO: The app for Just Eat is displayed on a smartphone in this posed picture in London, Britain, August 5, 2019. REUTERS/Toby Melville/File Photo

A Delivery Hero spokesman on Monday said the company would not comment on how it plans to exercise its voting rights.

Cat Rock, which owns roughly 3% of Just Eat, as well as 5.6%, of Takeaway, said it did not oppose Prosus’s offer in principle but considers it too low.

“We stand ready to consider fair offers from Prosus and any other interested buyers, but these offers must compete on a level playing field,” Cat Rock said.

Reporting by Toby Sterling, Anthony Deutsch, Bart Meijer, and Emma Thomasson; Additional reporting by Tanishaa Nadkar in Bengaluru; Editing by Jan Harvey, Keith Weir and David Goodman

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