However, one change has been the acceptance threshold, which was lowered to 75% of Just Eat’s shares from the previous level of 90%.
Prosus jumped in with its bid for the FTSE 100 firm three weeks ago, gate-crashing an all-share merger agreed between Just Eat and its Dutch rival Takeaway.com in August.
In its formal offer document, published on Monday morning, Prosus said the tie-up between Just Eat and Takeaway “will not fully or effectively address the challenges Just Eat is facing”, adding that financial markets were “underestimating” the scale of investment needed for the firm to defend its market share against competitors.
The firm is encouraging Just Eat’s shareholders to accept the offer before 1pm on 11 December, its first closing date.
The agreement between Takeaway.com and Just Eat has been under pressure since its announcement, with several prominent shareholders saying the deal undervalued the firm.
This issue has been compounded in recent months following a decline in Takeaway.com’s share price, which has fallen around 13.5% to €75.2 after hitting an all-time high at the end of August and subsequently reduced the overall value of its shares in relation to Just Eat’s.
As a result of the decline, Takeaway’s offer for Just Eat is now valued at about 609p per share, down from 731p when the tie-up was first announced.
However, Just Eat remained unmoved in the wake of Prosus’s offer document, reiterating its opinion that the bid “significantly undervalues” the business and that all shareholders should reject it.
“The board of Just Eat believes that the Takeaway.com combination is based on a compelling strategic rationale that will deliver a number of strategic benefits and greater value creation to Just Eat shareholders than the terms of the Prosus offer”, the company said.
Broker expects merger to fail, with higher Prosus bid to follow
In a note, analysts at Liberum said that despite Just Eat’s opposition to the Prosus bid, they were “sceptical that the merger [with Takeaway.com] will be passed, as c.10% of shareholders expressed they would not support the deal when Takeaway shares traded at a level that valued Just Eat at 770p and subsequently that effective price has fallen to 615p”.
“We thus see the proposed merger reaching the required threshold of 75% as unlikely, and could see another bid from Prosus emerging after the merger fails to go through”, the broker added, however, the price was likely to be higher as even the 710p per share bid form Prosus was “too light given comparable multiples… and is likely to be rejected by shareholders which could prompt another revised & improved bid”.
Investor hopes of a higher bid were reflected in late-morning trading, with the shares 0.3% lower at 736p but still well above the Prosus bid price.