Takeaway. com and Just Eat have reached an "agreement in principle" for a takeover deal that would value the latter at £5 billion (€5.6 billion), creating one of the largest online food delivery companies in the world.
The proposed all-share deal would see Amsterdam-based Takeaway.com acquire its London-based rival at 731p a share, a 15 per cent premium to Friday’s closing price of 636p.
Shares in Just Eat jumped 28 per cent to 816p after the news.
The announcement came after it emerged over the weekend that the two companies were in talks over a possible merger.
The tie-up would create a food delivery group that had a combined 360 million orders worth €7.3 billion in 2018, with a strong presence across Britain and Europe. The two companies do not have any significant geographical overlap: Just Eat is focused on Britain and western Europe, and is expanding into Canada, Latin America and Australia, while Takeaway.com holds a dominant position in Germany and eastern Europe.
Under the arrangement, Just Eat shareholders would own about 52.2 per cent of the new company, while Takeaway.com shareholders would own 47.8 per cent. The proposed deal gives Just Eat shareholders 0.09744 Takeaway.com shares for each share they currently own.
Jitse Groen, chief executive of Takeaway.com, would lead the group, with Just Eat chief financial officer Paul Harrison retaining his role at the new company.
The merged group – Just Eat Takeaway.com NV – would be incorporated, headquartered and domiciled in Amsterdam, while retaining a London listing. A “significant part of its operations” would remain in the UK.
There has been a surge of investment into the European food delivery market in recent months. In December, Takeaway.com agreed a €930 million acquisition of the German business of Delivery Hero, while Amazon led a $575 million (€516 million) funding round for Deliveroo in May.
Uber Eats, the food delivery arm of the ride-hailing company, cut fees for food delivery in the UK and Ireland earlier this year as it pushed to gain market share. Uber has flirted with dealmaking to expand in Europe before, including talks last year to link up with Deliveroo. However, the deal fell apart over price.
Just Eat and Takeaway.com said on Monday that talks were “ongoing” and “at an advanced stage”. Under UK takeover rules, the Dutch group has until August 24th to announce its “firm intention” to make an offer or pull out.
– Copyright The Financial Times Limited 2019