Just Eat share price dips amid investor concerns over Takeaway.com deal

Just Eat share price dips amid investor concerns over Takeaway.com deal
Written by:
Tsveta van Son
3rd September 2019
Updated: 11th March 2020
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Just Eat’s (LON:JE) share price has fallen into the red this Tuesday as top investor Eminence Capital flagged concerns over the group’s proposed tie-up with Takeaway.com. The news comes after the takeaway service companies agreed a merger deal in July.

As of 13:33 BST, Just Eat’s share price had given up 2.45 percent to 756.80p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.31 percent lower at 7,259.66 points. The group’s shares have given up about 2.5 percent of their value over the past year, as compared with about a three-percent fall in the Footsie.

Eminence Capital concerns

Reuters reported today that Eminence Capital, a US asset management firm which holds 4.4 percent of Just Eat, had said that while the company’s proposed merger with Dutch rival Takeaway.com had had a sound strategic rationale, the financial terms of the deal were ‘grossly inadequate’ to the London-listed company’s shareholders.

The proposed deal, agreed in July, 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, and will see shareholders in the London-listed group own approximately 52.2 percent of the combined group, with Takeaway.com shareholders to hold about 47.8 percent.

“It is clear to us that (Takeaway.com’s) offer of a 15-percent premium to (Just Eat’s) closing price on July 26 is highly opportunistic,” said Ricky Sandler, chief executive and chief investment officer of Eminence, as quoted by the newswire, adding that Eminence intended “to vote against this arrangement”.

Analysts on Just Eat

Liberum Capital reaffirmed its ‘buy’ rating on the FTSE 100 company 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 798.71p.

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