skip to Main Content
Get your free daily newsletter: Actionable insight every morning for the self-directed investor. 

Shares in Just Eat surged 24% to 733p today after receiving a counter bid from Prosus that values the company at £4.9 billion.

The 710p cash offer from Prosus is a 20% premium to the offer and about 12% higher than the shares were trading before the latter’s bid. Always a strong possibility given the increasingly low-ball offer from, a bidding war is now on. You may need more like 750p to sort this out.

The board of Just Eat has been engaged with Prosus but had already lower rejected bids and it has been quick to reject this offer. Prosus has sniffed an opportunity as the all-stock offer from has left JE shareholders nursing paper losses due to a drop in shares.

“Having initially valued JE at 731p, the latest implied offer for the company prior to the Prosus bid was a more meagre 594p,” says Neil Wilson, Chief Markets Analyst at “The more shares fell after the bid the less attractive the offer and the greater the likelihood of a cash counter bid. shares are trading +4% on this.”

There have been doubts about the offer being a bit low-ball. The Prosus offer is in many ways very cheeky and even more low-ball – it’s still under the 731p initial offer from and whilst it has been rejected, will certainly up the ante and could force into raising its offer as it looks in a weakened position due to the stock’s decline.

“That may not seem right looking at Just Eat’s recent share price of 586.90 but if taking into account that the company is in the midst of a £9 billion merger with Dutch rival and that it reported revenue growth of 25% in the last quarter Just Eat’s argument seems much stronger,” observes Fiona Cincotta at City Index.

Will this mean a bidding war for Just Eat?

After the news of the bid, investors were minded to think there was a prospect of a bidding war, with potentially Amazon coming in after the CMA called a halt to its integration with Deliveroo.

“It’s good news for JE shareholders,” comments Wilson at “Any tie-up offers the best way out, but management clearly think the strategic long-term value comes from the expertise of a hand-in-glove tie-up with still.”

As previously noted, a merger/takeover of enough scale gives Just Eat and its interim CEO the perfect exit, whilst also creating a company with the scale and strength to take on Deliveroo, Uber Eats and Amazon. Global expansion and fighting off fierce competition is coming at a cost. It has become a difficult task in managing growth and building out scale without eroding margins. Investment in Latin America via its 33% stake in iFood is proving especially costly.

More analysis for investors:

Become a better investor with SharePad Designed to give you the confidence to pick your own investments, Sharepad gives you access to a wealth of information on UK, US & European stocks. Find out more

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

Stocks in Focus

Here are some of the smaller companies we are following most closely. They all represent significant growth stories in our view. Our in-depth reports go into more detail on why we like them.


Get your free daily newsletter: Actionable insight every morning for the self-directed investor. 

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

FP Markets
Trade Nation
Back To Top