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Liberum slashes price target on Just Eat

By Iain Gilbert

Date: Wednesday 11 Dec 2019

LONDON (ShareCast) - (Sharecast News) - Analysts at Liberum slashed their target price on delivery business Just Eat from 1,360p to 870p on Wednesday after the firm's board rejected an improved takeover bid from Prosus.
Just Eat, which recommended shareholders accept an all-share merger with Takeaway.com, believes Prosus' 740p per share bid undervalued the group. The bid followed previously rejected bids - the highest of which at 710p which was subsequently put directly to shareholders for approval following multiple board rejections.

Liberum, which maintained its 'buy' rating on the stock, said it was not surprised by the rejection, noting that Just Eat's management had unanimously favoured an alternative all-share merger with Takeaway.com.

The broker also said it remained sceptical as to whether or not the bid would even reach the required 50% shareholder threshold to be accepted and expects a further improved bid to emerge given Just Eat's scale and dominance in the jurisdictions in which it operates.

However, despite its questions regarding the Press bid, Liberum also maintained its view that the all-share merger would not pass.

"While we believe that the bid is attractive from the perspective that the two groups are market leaders in the majority of their respective jurisdictions, have little geographic overlap and will create a market leader in 15 of the 23 operating markets, we do not see significant synergies and uplift from combining the two groups that justify the current proposal to Just Eat shareholders," said Liberum.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.


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