Shares in online food ordering platform Just Eat soared by almost a fifth on Monday 29th July, as the company confirmed rumours that it is in talks with rival Takeaway.com over a possible £9bn merger.
Specific terms have already been agreed, including Takeaway.com CEO Jitse Groen becoming CEO of the new merged entity and a proposal that while the company would be headquartered in Amsterdam where Takeaway.com is currently based, it would be listed on the London Stock Exchange. It is proposed that Just Eat shareholders would own approximately 52.2% of the business; and Takeaway.com shareholders would own approximately 47.8%.
The terms imply a value of 731 pence per share for Just Eat, a 15% premium based on closing share price on Friday 26th July.
Both companies are currently listed, each with a market cap of around €5bn. Combined they would have an estimated market value of over €10bn.
Under UK merger rules, they now have until 24th August to get final approval from investors to agree on the deal.
The potential market consolidation comes as both companies face increasing pressure from Uber Eats and Deliveroo, the latter of which is backed by Amazon. Neither company is a stranger to acquisitions with Takeaway.com most recently purchasing Delivery Hero’s German business in a €930m deal.