BIG NEWS
8 | SHARES | 01 August 2019
N
ews of a proposed merger between fast
food delivery group Just Eat (JE.) and
ƵƚĐŚďĂƐĞĚĐŽŵƉĞƟƚŽƌdĂŬĞĂǁĂLJ͘
com saw the former’s shares trade at a
εйƉƌĞŵŝƵŵƚŽƚŚĞϳϯϭƉŽīĞƌƉƌŝĐĞ͘
dŚŝƐŝŵƉůŝĞƐƚŚĞŵĂƌŬĞƚŝƐĐŽŶĮĚĞŶƚŽĨ
a counter bid from someone else.
The merger proposal shouldn’t
ĐŽŵĞĂƐĂƐƵƌƉƌŝƐĞďĞĐĂƵƐĞĂĐƟǀŝƐƚ
ŝŶǀĞƐƚŽƌĂƚZŽĐŬĂƉŝƚĂů͕ǁŚŝĐŚŚĂƐ
stakes in both businesses, cited a ‘clear
ƌĂƟŽŶĂůĞ͛ĨŽƌƚŚĞŵĞƌŐĞƌŝŶĂŶŽƉĞŶ
ůĞƩĞƌƚŽŵĂŶĂŐĞŵĞŶƚŽŶϭϭ&ĞďƌƵĂƌLJ͘
A lot of investors have shorted Just Eat’s
ƐŚĂƌĞƐ͕ŵĞĂŶŝŶŐƚŚĞLJǁŽƵůĚƉƌŽĮƚĨƌŽŵĂĚĞĐůŝŶĞ
ŝŶƚŚĞƐŚĂƌĞƉƌŝĐĞ͘ůŽƐŝŶŐƚŚĞƐŚŽƌƚƉŽƐŝƟŽŶƐǁŝůů
ƉƵƚĞdžƚƌĂƵƉǁĂƌĚƉƌĞƐƐƵƌĞŽŶƚŚĞƐŚĂƌĞƐ͘ZŽƵŐŚůLJ
ρϬŵƐŚĂƌĞƐŽƌϳ͘ϯκйŽĨƚŚĞƐƚŽĐŬĂƌĞŚĞůĚƐŚŽƌƚ͕
up from 4% since the start of the year, according
ƚŽƐŚŽƌƩƌĂĐŬĞƌ͘ĐŽŵ͘
^ĞĐŽŶĚůLJ͕ƚŚĞĚĞĂůŵĂLJŇƵƐŚŽƵƚĂŚŝŐŚĞƌ͕
ĐŽŵƉĞƟŶŐŽīĞƌĨŽƌƚŚĞĐŽŵƉĂŶLJ͘KƌŝŐŝŶĂůůLJĂ
ƉƵƌĞͲƉůĂLJŚŝŐŚŵĂƌŐŝŶƚĂŬĞĂǁĂLJƉůĂƞŽƌŵ͕ĨŽĐƵƐŝŶŐ
on restaurants that do their own delivery, Just Eat
has struggled to execute on its plans to build its
own delivery system.
ĂƚZŽĐŬǁĂƐĐƌŝƟĐĂůŽĨƚŚĞďŽĂƌĚ͛ƐĂƉƉŽŝŶƚŵĞŶƚ
ŽĨƉƌĞǀŝŽƵƐĐŚŝĞĨĞdžĞĐƵƟǀĞWĞƚĞƌWůƵŵď͕ǁŚŽŝƚJust Eat shareholders
should hold out for
a better offer
Takeaway.com’s merger price looks too low and others may also be interested
claimed to lack online food delivery experience.
^ŽƵƚŚĨƌŝĐĂŶŐƌŽƵƉEĂƐƉĞƌƐŚĂƐďĞĞŶ
ŝŶǀĞƐƟŶŐŝŶĨŽŽĚĚĞůŝǀĞƌLJĂŶĚŚĂƐĂϮϮ͘ρй
stake in German company Delivery
Hero, while Uber and Deliveroo have
entered the UK food delivery market,
ƉƵƫŶŐƉƌĞƐƐƵƌĞŽŶ:ƵƐƚ ĂƚƐ͛
ŵĂƌŬĞƚƉŽƐŝƟŽŶ͘
ŶĂůLJƐƚƐĂƚ>ŝďĞƌƵŵďĞůŝĞǀĞ
the regulator might allow an Amazon/
:ƵƐƚ ĂƚƟĞͲƵƉŝŶƉƌĞĨĞƌĞŶĐĞƚŽĐƵƌƌĞŶƚ
plans for Amazon to invest in Deliveroo.
The third reason is related to the current
ĚĞĂů͛ƐŵĞƚƌŝĐƐ͘&ŽůůŽǁŝŶŐĐŽŵƉůĞƟŽŶ͕:ƵƐƚ Ăƚ
shareholders will own 52.2% and Takeaway.com
κϳ͘ΘйŽĨƚŚĞĐŽŵďŝŶĞĚƐŚĂƌĞĐĂƉŝƚĂů͘
:ƵƐƚ ĂƚŚĂƐĂďƵƐŝŶĞƐƐǁŚŝĐŚŝƐƚŚƌĞĞƟŵĞƐůĂƌŐĞƌ
ƚŚĂŶŝƚƐĂĐƋƵŝƌĞƌĂŶĚŵĂĚĞάΘϮ͘ϳŵŽĨƉƌŽĮƚůĂƐƚ
LJĞĂƌǁŚŝůĞdĂŬĞĂǁĂLJ͘ĐŽŵŝƐƐƟůůůŽƐƐͲŵĂŬŝŶŐ͘
However the combined company will be run
by Takeaway.com management, and will be
incorporated, headquartered and domiciled in
ŵƐƚĞƌĚĂŵ͕ĂůďĞŝƚǁŝƚŚĂůŝƐƟŶŐŽŶƚŚĞ>ŽŶĚŽŶ
Stock Exchange.
dŚĞŝŵƉůŝĞĚĞŶƚĞƌƉƌŝƐĞǀĂůƵĞͲƚŽͲƐĂůĞƐĂƚĮǀĞͲƟŵĞƐ
ŝƐƌŽƵŐŚůLJŚĂůĨƚŚĞŵƵůƟƉůĞƚŚĂƚdĂŬĞĂǁĂLJ͘ĐŽŵƉĂŝĚ
for the German business of Delivery Hero last year.
This may prompt Just Eat’s shareholders to reject
ƚŚĞŽīĞƌ͕ŽŶƚŚĞďĂƐŝƐƚŚĂƚŝƚŵĂƚĞƌŝĂůůLJƵŶĚĞƌǀĂůƵĞƐ
the company, and encourage management to
ŶĞŐŽƟĂƚĞĂĨĂŝƌĞƌƉƌŝĐĞ͘
Takeaway.com will have to make a formal
ŽīĞƌďĞĨŽƌĞϮκƵŐƵƐƚ͘/ĨŝƚŐŽĞƐĂŚĞĂĚ͕:ƵƐƚ Ăƚ
ƐŚĂƌĞŚŽůĚĞƌƐǁŝůůƌĞĐĞŝǀĞϬ͘ϬεϳκκdĂŬĞĂǁĂLJ͘ĐŽŵ
shares in return for each Just Eat share.
tĞƐƵŐŐĞƐƚƐŚĂƌĞŚŽůĚĞƌƐƐŝƚƟŐŚƚŝŶĂŶƟĐŝƉĂƟŽŶ
ŽĨĂďĞƩĞƌŽīĞƌĨƌŽŵdĂŬĞĂǁĂLJ͘ĐŽŵŽƌƚŚĞŽƵƚƐŝĚĞ
ĐŚĂŶĐĞŽĨĂĐŽƵŶƚĞƌͲŽīĞƌ͘Just Eat
shareholders
will own 52.2%
and Takeaway.com
47.8% of the
combined share
capital