Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Late last year, erstwhile activist Cat Rock Capital (which owned about 2% of the company) sent the board of <a href="https://www.smartkarma.com/entities/just-eat-plc" target="_blank" data-smartkarma-citation="entities:22014:1" rel="noopener">Just Eat PLC (JE/ LN)</a> a letter saying they wanted things to change after a year when the company's shares fell 25%. They introduced a set of proposals which proposed (as per their mid-January 2019 press release and <a href="https://justeatmustdeliver.com/" target="_blank" rel="noopener">https://justeatmustdeliver.com/</a> website launch) that the company...<ol>
<li>Publicly commit to an appropriate and achievable three-year financial plan;</li>
<li>Align management’s remuneration to the achievement of the three-year financial plan; and</li>
<li>Evaluate strategic alternatives for non-core assets that may deliver significant value to shareholders if sold at fair prices.</li>
</ol>In January, Peter Plumb stepped down as CEO with immediate effect and Peter Duffy, Chief Customer Officer, was appointed Interim Chief Executive Officer and Director with a search for a permanent replacement to begin immediately. Less than 8 weeks later Duffy had removed himself from consideration. This surprised (and upset) a few people. Five+ months after rejecting the post, Peter Duffy is still interim CEO and the board is taking its time.In March, around earnings results, the company told shareholders that a deal with Dutch rival <a href="https://www.smartkarma.com/entities/takeaway-com-nv" target="_blank" data-smartkarma-citation="entities:28360:1" rel="noopener">Takeaway.com NV (TKWY NA)</a> was not in the cards. Then on 27 July of this year, Just Eat<a href="https://www.justeatplc.com/news-and-media/press-releases/response-speculation" target="_blank" rel="noopener">responded</a> to "speculation" of a possible deal between the two, confirming Just Eat was in discussions regarding a "possible combination" with Takeaway.com to create the western world's largest food delivery company, with a 24 August deadline for TKWY to put up or shut up according to Rule 2.6(a).The companies reached an <a href="https://www.justeatplc.com/news-and-media/press-releases/possible-combination-just-eat-plc-and-takeawaycom" target="_blank" rel="noopener">agreement in principle</a> just two days later on the 29th whereby Just Eat shareholders would get 0.09744 shares of Takeaway.com and would own 52.2% of the newly-merged company. That deal was worth, theoretically, about GBp 731/share. This still required a firm Offer by 24 August but it only took them a week to get a <a href="https://www.justeatplc.com/news-and-media/press-releases/recommended-all-share-combination-takeawaycom-nv-and-just-eat-plc" target="_blank" rel="noopener">Recommended Offer</a> presented. It came at a 15% premium to the 26 July undisturbed price, which got Just Eat shareholders the majority ownership of NEWCO. Jitse Groen, CEO of Takeaway.com, would become CEO of the joint entity, and the other major roles would be split (CFO from JE, co-COOs would be one from each).Since then, despite Just Eat trading through terms relatively consistently, a combination of a 10+ fall in Takeaway.com and a sharp rise in the value of the pound sterling has meant a fall in the sterling price of Just Eat shares. On Monday, the spread closed in positive territory for the first time since announcement day.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/103/348/original/Screenshot%202019-10-27%20at%2010.58.16%20AM.png?1572145119" class="editor-image img-responsive" data-smartkarma-image-id="103348"></figure><div style="text-align: left;" class="content-caption">       source: capitalIQ, Quiddity</div><h2>The NEW News</h2>The NEW News Tuesday was that just one day after <a href="https://www.smartkarma.com/entities/just-eat-plc" target="_blank" data-smartkarma-citation="entities:22014:1" rel="noopener">Just Eat PLC (JE/ LN)</a>  <a href="https://www.justeatplc.com/news-and-media/press-releases/q3-2019-update" target="_blank" rel="noopener">updated the market on Q3 results</a> sending the stock to a 52-week low on an intraday basis, enabling new arbitrageurs to put on the long Just Eat short TKWY trade at a positive spread for the first time, two things happened. <ol>
<li>
Just Eat and TKWY published their Scheme Document Prospectus (<a href="https://corporate.takeaway.com/transaction/just-eat-takeawaycom/?ufprt=0263EAD92C3EA22B9C7C48B75E2068E95371F6DEE83542B49D7E3F18797E0EC975A65B980829BEEB791D9E4C5398805139BE4DAED7782CA54B4FE6702EB1EAE288BA6CC509E06CC5EA0302CC1BB9768B5AF55F4EB446C63827ED322AD10C77CE43E8F52AD17F5F787939748FB7C178F2D20BACA9&amp;code=2D0031007C0064006F0077006E006C006F00610064007C0031003100300037007C003100380038003700" target="_blank" rel="noopener">pdf download link from Takeaway.com</a>, <a href="https://corporate.takeaway.com/transaction/just-eat-takeawaycom/?ufprt=A0DA8F5F30F245A8D10C1CC025DE35A361FA14414E9FC3E91B798DF8D0C80E0692CA183FD3BADA58E1D83005BACA815756E745262251DB6ECB42FB4EA3841D287BBBE3D5967688E843BD2B35E252F994D1021DDF3A324A82C10310BBF2EC46E96869AFA28961D909FDC5DAF7AB27D9444BE42122&amp;code=2D0031007C0064006F0077006E006C006F00610064007C0031003100300037007C003100380038003800" target="_blank" rel="noopener">Summary pdf download link</a>)</li>
<li>
<a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a><a href="https://www.prosus.com/getmedia/cba9f742-cde1-4912-8659-244af0db0e0a/Cash-Offer-for-Just-Eat-plc.pdf" target="_blank" rel="noopener">announced</a> an unsolicited cash Takeover Offer for Just Eat at GBp710/share, which is a 20% premium to where Just Eat closed yesterday (<a href="https://www.prosus.com/getmedia/990b5968-2a96-48d3-ac1d-b33d65491004/Cash-Offer-for-Just-Eat-plc-%e2%80%93-Investor-Presentation.pdf" target="_blank" rel="noopener">presentation</a>).</li>
</ol>Not long after that, Just Eat rejected the Prosus offer (as they had rejected previous offers of GBp670 and GBp700) because the proposal "significantly undervalues Just Eat and the Takeaway.com combination" and the Prosus Offer "fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects."Takeaway.com initially traded sharply higher on short-covering, but fell back. Just Eat is trading 17% through Takeaway.com terms and 6.7% through Prosus terms. The whole thing is weird. There is an activist who didn't like the JE/TKWY deal and said last month they would vote against. There is another long-only who thought it was too low. And both of them were saying that about the Just Eat/Takeaway.com deal when the shares of both were trading higher. There is another activist who said the JE/TKWY deal was fine, but the Prosus deal should be 30% higher (despite it being 17% though terms. Then there is the matter of Prosus' minority holding Delivery Hero selling down Just Eat shares. There is a lot going on here.This could get messier before it gets cleaner. But it IS interesting. And Prosus is seemingly making good on its promise to go for scale. And for those investors in Just Eat who like the deal with Takeaway.com and want to take shares in the company, <a href="https://www.smartkarma.com/entities/delivery-hero-ag" target="_blank" data-smartkarma-citation="entities:24416:1" rel="noopener">Delivery Hero Ag (DHER GY)</a>  may have some to sell. More discussion below.

Late last year, erstwhile activist Cat Rock Capital (which owned about 2% of the company) sent the board of Just Eat PLC (JE/ LN) a letter saying they wanted things to change after a year when the company's shares fell 25%. They introduced a set of proposals which proposed (as per their mid-January 2019 press release and https://justeatmustdeliver.com/ website launch) that the company...
Publicly commit to an appropriate and achievable three-year financial plan;
Align management’s remuneration to the achievement of the three-year financial plan; and
Evaluate strategic alternatives for non-core assets that may deliver significant value to shareholders if sold at fair prices.
In January, Peter Plumb stepped down as CEO with immediate effect and Peter Duffy, Chief Customer Officer, was appointed Interim Chief Executive Officer and Director with a search for a permanent replacement to begin immediately. Less than 8 weeks later Duffy had removed himself from consideration. This surprised (and upset) a few people. Five+ months after rejecting the post, Peter Duffy is still interim CEO and the board is taking its time.In March, around earnings results, the company told shareholders that a deal with Dutch rival Takeaway.com NV (TKWY NA) was not in the cards. Then on 27 July of this year, Just Eatresponded to "speculation" of a possible deal between the two, confirming Just Eat was in discussions regarding a "possible combination" with Takeaway.com to create the western world's largest food delivery company, with a 24 August deadline for TKWY to put up or shut up according to Rule 2.6(a).The companies reached an agreement in principle just two days later on the 29th whereby Just Eat shareholders would get 0.09744 shares of Takeaway.com and would own 52.2% of the newly-merged company. That deal was worth, theoretically, about GBp 731/share. This still required a firm Offer by 24 August but it only took them a week to get a Recommended Offer presented. It came at a 15% premium to the 26 July undisturbed price, which got Just Eat shareholders the majority ownership of NEWCO. Jitse Groen, CEO of Takeaway.com, would become CEO of the joint entity, and the other major roles would be split (CFO from JE, co-COOs would be one from each).Since then, despite Just Eat trading through terms relatively consistently, a combination of a 10+ fall in Takeaway.com and a sharp rise in the value of the pound sterling has meant a fall in the sterling price of Just Eat shares. On Monday, the spread closed in positive territory for the first time since announcement day.       source: capitalIQ, QuiddityThe NEW NewsThe NEW News Tuesday was that just one day after Just Eat PLC (JE/ LN)  updated the market on Q3 results sending the stock to a 52-week low on an intraday basis, enabling new arbitrageurs to put on the long Just Eat short TKWY trade at a positive spread for the first time, two things happened. 

Just Eat and TKWY published their Scheme Document Prospectus (pdf download link from Takeaway.com, Summary pdf download link)

Prosus (PRX NA)announced an unsolicited cash Takeover Offer for Just Eat at GBp710/share, which is a 20% premium to where Just Eat closed yesterday (presentation).
Not long after that, Just Eat rejected the Prosus offer (as they had rejected previous offers of GBp670 and GBp700) because the proposal "significantly undervalues Just Eat and the Takeaway.com combination" and the Prosus Offer "fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects."Takeaway.com initially traded sharply higher on short-covering, but fell back. Just Eat is trading 17% through Takeaway.com terms and 6.7% through Prosus terms. The whole thing is weird. There is an activist who didn't like the JE/TKWY deal and said last month they would vote against. There is another long-only who thought it was too low. And both of them were saying that about the Just Eat/Takeaway.com deal when the shares of both were trading higher. There is another activist who said the JE/TKWY deal was fine, but the Prosus deal should be 30% higher (despite it being 17% though terms. Then there is the matter of Prosus' minority holding Delivery Hero selling down Just Eat shares. There is a lot going on here.This could get messier before it gets cleaner. But it IS interesting. And Prosus is seemingly making good on its promise to go for scale. And for those investors in Just Eat who like the deal with Takeaway.com and want to take shares in the company, Delivery Hero Ag (DHER GY)  may have some to sell. More discussion below.

New Prosus Offer Won't Take Away Just Eat

European Event-Driven Analyst

Patryk Basiewicz

PGB Research

On September 22, Prosus made an offer for <a href="https://www.smartkarma.com/entities/just-eat-plc" target="_blank" data-smartkarma-citation="entities:22014:1" rel="noopener">Just Eat PLC (JE/ LN)</a> at 710p per share or c. 20% above Just Eat’s closing share price on the previous day and the price implied by the Takeaway.com bid. Prosus' bid is hostile.
Currently, the spread is trading though the terms at c. 3.8%, implying a further bump from <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> or <a href="https://www.smartkarma.com/entities/takeaway-com-nv" target="_blank" data-smartkarma-citation="entities:28360:1" rel="noopener">Takeaway.com NV (TKWY NA)</a>, or a counterbid from a third party. Note that once Just Eat is taken over then entry into the UK (and other Just Eat’s markets) will be very difficult in the future. So there is a good reason to think that other players are looking at the further bid.
Below I analyse who could enter the fray. Also, I discuss implications of the CMA’s recent order with regards to Amazon/Deliveroo deal.

On September 22, Prosus made an offer for Just Eat PLC (JE/ LN) at 710p per share or c. 20% above Just Eat’s closing share price on the previous day and the price implied by the Takeaway.com bid. Prosus' bid is hostile.
Currently, the spread is trading though the terms at c. 3.8%, implying a further bump from Prosus (PRX NA) or Takeaway.com NV (TKWY NA), or a counterbid from a third party. Note that once Just Eat is taken over then entry into the UK (and other Just Eat’s markets) will be very difficult in the future. So there is a good reason to think that other players are looking at the further bid.
Below I analyse who could enter the fray. Also, I discuss implications of the CMA’s recent order with regards to Amazon/Deliveroo deal.

Just Eat (JE/ LN): Who Else Can Enter the Bidding War?

United Kingdom

Just Eat Takeaway.com N.V. is an online food ordering company. The Company offers mobile application for ordering and delivering of food and beverages. Just Eat Takeaway.com serves customers worldwide.

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Just Eat Takeaway.com NV (TKWY NA)

New Prosus Offer Won't Take Away Just Eat

Late last year, erstwhile activist Cat Rock Capital (which owned about 2% of the company) sent the board of Just Eat PLC (JE/ LN) a letter saying...

Travis Lundy

Just Eat (JE/ LN): Who Else Can Enter the Bidding War?

On September 22, Prosus made an offer for Just Eat PLC (JE/ LN) at 710p per share or c. 20% above Just Eat’s closing share price on the previous...

Patryk Basiewicz

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