Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) €4.1 billion takeover is set to pave the way for a merger with its formerly part-owned Brazil-focused iFood among sweeping changes, analysts say.
Dutch investment firm Prosus on Monday unveiled a €20.30 per share deal to buy Just Eat, which Panmure Liberum noted followed a poor period for the delivery firm.
Prosus, having bought Just Eat’s 33% stake in iFood in 2022, would have a “clear aim” of merging the two under sweeping changes, including addressing its largely unprofitable non-European business.
These would also likely see Just Eat’s exit from further non-European geographies and an overhaul of its order control and dispatch system, Panmure added in a damning review.
“Make no mistake, Prosus are executing a cut-price acquisition of an ailing company whose management needed to do something, but have shown us over the past five years that they knew not what that was,” analysts said.
“Better to let someone else have a crack then,” Panmure said, adding it had kept a ‘buy’ rating on Just Eat “through gritted teeth”.
“For a takeaway delivery company the most damning thing that can be said about Just Eat to date is that it isn’t very good at delivering takeaways,” Panmure noted.
Efforts to strip cost per order down to rivals’ levels could free up around €500 million to €1 billion in courier cost alone, according to analysts, covering Prosus’ offer premium.
Shares were up 54.9% at €19.24 on Monday.