French fund manager BDL Capital Management has slammed Prosus’ bid for Just Eat Takeaway.com, saying the offer for one of Europe’s largest food delivery businesses is less than half of what it considers fair value.
“As a long-term investor in the company [Just Eat], BDL is concerned about the bid price and the way in which the bid is structured,” the fund manager said in a statement on Wednesday.
BDL said it had been investing in Just Eat since 2021, and now holds about 2.18% of the company, or 4.55-million shares.
In February, Prosus announced it had reached an agreement to buy Just Eat Takeaway.com for €4.1bn in what is its largest investment yet.
The group, listed on the Euronext and JSE, has championed the transaction as having a compelling rationale, offering Just Eat shareholders an attractive cash premium while providing Prosus with a unique opportunity to create an AI-first European tech champion.
The offer translates to €20.30 a share, but BDL is of the opinion “this price offer is far below a reasonable and fair valuation of the company”.
On announcing the deal, Prosus had said the price represented a 49% premium to Just Eat Takeaway.com’s three-month, volume-weighted average price on February 21, and a 22% premium to its three-month highest closing price.
BDL said its analysis found Just Eat Taleaway.com was worth €56.1 a share or €11.7bn in total, suggesting the Naspers-backed bid undervalues the group by 64%.
News of the deal on February 24 sent Just Eat Takeaway.com shares rocketing 54% on the day, valuing the business at $4bn and just shy of Prosus’ $4.3bn offer.
“We are very concerned about the announced bid as we consider the bid price unfair,” said Hughes Beuzelin, founder & CEO of BDL.
‘Substantial risk’
Beuzelin said BDL it was opposed to the deal “because of the substantial risk that management’s recommendation to agree to the bid may be influenced by the prospect of future management incentives from Prosus, and because Prosus and the company intend to use a squeeze-out mechanism to secure a deal that — due to its structure — can be completed without testing the willingness to accept it of a sufficiently large majority of the shareholder base".
“We doubt, therefore, whether the agreement and recommendation of the management board and the supervisory board can be considered proper policy of the company.”
Last week Prosus and Just Eat Takeaway.com said they are making good progress on the preparations for the offer.
In 2020, Naspers and the Amsterdam-listed unit failed to secure a high-profile bid for Just Eat, losing out to Takeaway.com, which paid $8bn.
At the time, Prosus’ £5bn bid (about R98bn at the time) was seen as a sign of an ambitious strategy to build a bigger food delivery business to take on Silicon Valley giant Uber Eats and Amazon-backed Deliveroo.
While Prosus is now under new management, led by CEO Fabricio Bloisi, its ambition to build a European food delivery powerhouse remains firmly in place.
This time, though, it would be acquiring the combined Just Eat and Takeaway.com, at a lower price, all with the benefit of lessons learnt since the first attempt.
At 8pm on Wednesday, Just Eat Takeaway.com shares were up 0.44% at €19.47.
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