The running battle between Prosus and Takeaway.com to gain control of UK-based Just Eat to create a giant food-delivery business to rival UberEats may be over bar the shouting.

The deadline for shareholders to vote for their preferred offer is looming, but it seems that Takeaway.com has pipped its rival to the post.

Shareholders of Just Eat have until 1pm London time on 10 January 2020 to vote for the recommended Takeaway.com offer, or for the 800-pence a share cash offer from Naspers subsidiary Prosus.

Both firms increased their offers in December, with Prosus raising its cash offer from 740p to 800p. This is 19% more than the 670p that it launched its hostile bid with in August 2019.

Takeaway.com is offering 0.12111 new shares for every Just Eat share held, which equates to 872p a share. Just Eat shareholders will own about 57.5% of the combined group with Takeaway.com shareholders owning the remaining 42.5% of the combined group. This has been sweetened from the 52.12% previously offered.

What may also appeal to shareholders is the possibility that Jitse Groen, the CEO of Takeaway.com, may sell Just Eat’s stake in iFood, Brazil’s answer to Uber Eats, and Deliveroo, and return some of the proceeds to shareholders. That is, if the Takeaway.com deal prevails.

Ironically, Prosus is an investor in iFood and could end up buying the stake, estimated at about £440-million.

For its part, the board of Just Eat believes both final offers to be fair and reasonable relative to the standalone value of Just Eat, but it has remained unwavering in its support of the Takeaway.com offer.

This goes back to July 2019 when Takeaway.com and Just Eat announced their recommended all-share merger. The vote would long since have been put to shareholders had it not been for the fact that in October Prosus inserted itself into the mix, launching a hostile 710p-a-share bid after its two previous proposals of 670p and 700p were rejected by the Just Eat board.

The Just Eat board believes the Takeaway.com offer (which is effectively a merger) will allow shareholders to participate in the upside potential of the enlarged group. The Prosus offer is a buyout of Just Eat shareholders who must choose between future upside value (which isn’t guaranteed) in return for cash in hand today.

The resulting bidding war has hyped up Just Eat and the food delivery sector in general. As a result, many investors are enthusiastic about a merger that will create the second-largest food delivery player globally and the largest outside China, which will be the market leader in 15 of the 23 countries where it operates and which will provide access to a founder-led management team, led by Groen, which has achieved success in the sector.

In December 2019 the board of Takeaway.com noted that it had firm commitments from shareholders holding 46.07% of the issued share capital of Just Eat to accept the final Takeaway.com offer. Since then news agency Bloomberg reported that another 4% of Just Eat shareholders had indicated support for the Takeaway.com offer without having formally tendered their offers. If correct, these votes will take Takeaway.com over the line.

Despite Prosus’ all-cash offer, which the Board of Just Eat recognised would provide immediate cash value to Just Eat shareholders, it seems the Takeaway.com offer was the more compelling.

But it’s not over till it’s over and the final Takeaway.com offer remains subject to the approval of Takeaway.com shareholders. The required approval will be sought at the extraordinary general meeting convened for Thursday, 9 January 2020.

If the deal does not come off for Prosus, CEO Bob van Dijk will dust himself off and move on to the next one. But he will be disappointed. Prosus unbundled from Naspers and listed on the Euronext in September 2019, and Van Dijk is staking his reputation on transforming the e-commerce player into one that is not dependant on its Tencent dividend flow to survive.

“We have been very clear from the beginning about our ambition to build the world’s leading food delivery business. The acquisition of Just Eat, which brings its portfolio of good market positions, would be a meaningful step in realising this goal,” he said in a statement in December 2019.

Oddly, in December Prosus elected not to buy Just Eat shares on the open market to support its bid. Van Dijk explained this, saying that Just Eat will require significant investments in own-delivery and technology and the company did not want to over-invest.

“We have always stated that we would remain disciplined with respect to price on acquiring Just Eat, balancing our desire to own an attractive business with the need for significant investment in that business while maintaining acceptable returns for Prosus shareholders.”

Time will bear witness. Will the Naspers’ investment vehicle have missed a big opportunity to participate in the explosive growth of food delivery?

Or will Prosus have dodged an expensive £5.5-billion bullet that will need considerably more investment if it is to reach the scale necessary to deliver profits to shareholders? BM

Read more:

• Prosus ups the Just Eat ante as competition hots up
• Prosus, Takeway place final offer in Just Eat food battle