The chief executive of food ordering company Takeaway.com on Wednesday said he did not want to overpay as his company pursues an agreed merger with Britain's Just Eat, despite a higher unsolicited offer from rival Prosus.
Takeaway's current all-share bid values Just Eat at £4.3 billion ($5.5 billion), and Takeaway shareholders would receive around 48% of the combined company.
In a small crowd of investors and reporters on the sidelines of the Morgan Stanley European Technology, Media & Telecom Conference in Barcelona, CEO Jitse Groen was asked if he wanted to raise his bid.
“I don’t want to be the idiot that runs into a ratio that doesn’t make any sense,” said Groen, referring to decreasing the percentage of the shares Takeaway.com owners would hold in the merged company.
When asked again if the answer was "no," Groen added "No. Look, the combination is the new Booking.com, so I think for investors, that's the thing to think about," he said, referring to the online service that grew to dominate its sector by offering the largest selection of hotels and an easy-to-use ordering app.
Takeaway later issued a statement saying Groen "did not state that the Takeaway offer will not be changed." A spokesman for the company added Groen had not been answering a reporter's question.
Prosus' cash offer of 710 pence values Just Eat at around $6.3 billion, a premium of 12% to Takeaway.com's offer at the current share price.
Groen, who owns 25% of Takeaway himself, said there was "a lot" of backing from shareholders.
"Because they are the same shareholders, there's a lot of overlap. People know our track record," he said.
A Takeaway spokesman said that Groen was not indicating any level of shareholder support for the deal, but feels well-supported by its shareholders generally.
Possible Higher Offer
Just Eat shares closed at 739.4 pence, a signal investors still believe a higher offer is on the cards.
Investor Cat Rock, which holds 5.69% of Takeaway shares and 2.6% of Just Eat, has said it backs the merger and opposes the Prosus bid as insufficient.
However, Aberdeen Standard Investments and Eminence Capital with 4.92% and 4.26% of Just Eat respectively have said they consider the Takeaway offer too low.
Prosus, which has argued it has more resources to invest after poor third quarter results from Just Eat, responded on Wednesday by saying that Takeaway underestimates "the level of investment required in a sector that is changing rapidly".
"Ours is the only offer that provides the certainty of cash to shareholders at an attractive and fair value," it said.
Takeaway also on Wednesday outlined plans to introduce Takeaway's branded delivery service in Britain if its bid for Just Eat succeeds, and to combine the two companies' IT systems to save on costs.
Those changes would cost "tens of millions" of euros in the short term but would strengthen the combination's competitive position and lead to long-term growth, it said.