Just Eat share price soars amid Takeaway.com deal

on Jul 29, 2019
Updated: Mar 11, 2020

Just Eat’s (LON:JE) share price is rallying in London this Monday as the online takeaway service agreed a merger deal with Dutch company Takeaway.com. The news marks a boost for the blue-chip company, whose shares recently came under pressure as it emerged that e-commerce giant Amazon was set to invest in rival Deliveroo.

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As of 08:41 BST, Just Eat’s share price had added 23.41 percent to 784.40p, outperforming the broader market rally which has seen the benchmark FTSE 100 index currently stand 0.95 percent higher at 7,620.70 points. The group’s shares have given up just under nine percent of their value over the past year, as compared with about a one-percent fall in the Footsie.

Just Eat in merger deal

Just Eat announced in a statement this morning that it had agreed in principle a merger deal with Takeaway.com, having confirmed talks with the Dutch group over the weekend. The all-share deal will see Just Eat shareholders own approximately 52.2 percent of the combined group, with Takeaway.com shareholders to hold about 47.8 percent. The proposed deal implies a value  for the London-listed group of 731 pence per share, representing  a premium of 15 percent to Just Eat’s closing share price on July 26.

Just Eat said that the proposed tie-up would create one of the world’s largest online food delivery platforms with 360 million orders worth €7.3 billion in 2018.

Analysts on FTSE 100 group

“The deal gives Just Eat and its interim CEO the perfect exit, whilst also creating a company with the scale and strength to take on Deliveroo, Uber Eats and Amazon,” said Neil Wilson, analyst at Markets.com, as quoted by Proactive Investors.

Liberum Capital reaffirmed the company as a ‘buy’ today, without specifying a target on the Just Eat share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 787.19p.

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