Prosus increased its hostile cash offer for the group on Monday to 740p per share while also reducing the acceptance threshold to 50% in an effort to push the bid through.
The new offer is 4% higher than Prosus’s original bid and values Just Eat at £5.1bn or around 5% more than the terms of rival Takeaway.com’s proposed merger.
In a statement on Tuesday, Just Eat’s management unanimously recommended shareholders take no action in regards to the new offer, reiterating their previous argument that the Prosus bid “significantly undervalues Just Eat and its attractive assets and prospects”.
The company also highlighted that the bid represented a 5% discount to its close price on Friday, as well as a premium of only 4% of Prosus’ original offer.
Broker sceptical either bid will succeed
While Just Eat’s management are trumpeting the benefits of the all-share merger with Takeaway.com instead of the Prosus bid, analysts at Liberum are sceptical that either of the offers will pass muster with investors.
In a note slashing the company’s target price to 870p from 1,360p, analysts said they expected “a further improved bid to emerge” from Prosus as they did not think the current offering would reach the reduced 50% threshold.
However, they did not expect Prosus to give up on its efforts, instead predicting the firm will respond with a higher bid in the future.
Liberum also saw a similarly negative outcome for the Takeaway.com merger, citing “expressed negative sentiment” around the deal from two of Just Eat’s institutional shareholders, Eminence Capital and Aberdeen Standard, as key stumbling blocks.
Just Eat shares were flat at 781.4p in mid-morning trading.