Takeaway.com’s Possible Bid for Just Eat May Spark Food Fight

Takeaway.com is in takeover talks with rival Just Eat Plc, a $5.3 billion deal that would mark a fight against rivals including Uber Technologies Inc.

The food delivery industry in Europe has been a battleground, with rivals competing on prices and copying each other’s business models. The all-share deal that’s being considered from Takeaway is another sign the Dutch-based company is intent on taking on its better-known rivals.

Food delivery has been one of the fastest growing industries in the tech sector, and investors have been pumping money into startups in a bid to dominate each market. Both Takeaway.com and Just Eat run marketplace models, connecting users with takeout food but leaving delivery to the restaurants. Uber Eats is launching a rival marketplace platform in the U.K., following the entry of Amazon.com Inc.-backed Deliveroo in mid-2018.

“The total valuation of companies engaged in restaurant food delivery likely tops $100 billion,” said Bloomberg Intelligence analysts in a note last week, “and would be more if grocery-delivery companies’ food-specific operations were included.”

U.K. Market

Just Eat confirmed Saturday it’s in talks to be acquired by Takeaway.com, following a report from Sky News. Both companies said that there’s no certainty whether an offer will be made and on what terms. Amsterdam-based Takeaway.com has a market capitalization of 5.1 billion euros ($5.7 billion), compared with Just Eat’s 4.3 billion-pound ($5.3 billion) valuation.

A deal for Just Eat would be the second time Takeaway.com has entered the U.K. market. The company first launched in the country in 2012, but sold the business four years later to Just Eat, after struggling with growth.

Takeaway.com has also been rapidly expanding following a surging share price. In December it agreed to buy rival Delivery Hero SE’s German operations for about $1 billion, ending an expensive rivalry in a country where both were competing for market share at the cost of profitability.

Shareprice change, %

It would also be something of a bailout for Just Eat, which has stuttered in the face of pressure from rivals and an activist shareholder. Once the dominant player in the food delivery market in the U.K., its shares have fallen in the face of growing competition from Uber Eats and Deliveroo amid escalating talk of consolidation in the sector

Just Eat shares have fallen 25% over the past 12 months, while Takeaway.com is up 46%.

Any deal would also help solve the vacuum at the top of Just Eat’s management. Former Chief Executive Officer Peter Plumb stepped down in January, and interim CEO Peter Duffy has taken himself out of the running for the top job for personal reasons. Jitse Groen, the billionaire founder of Takeaway.com, has been penciled in as the CEO of the combined company, according to a person familiar with the matter.

Groen launched Takeaway in 2000 in his dorm room at the University of Twente. The business now has more than 44,000 restaurants on its platform in 12 countries, with the bulk in the Netherlands and Germany. Groen’s wealth is estimated at about $1.5 billion. In 2018, he told Bloomberg News he believed the “most value is in being the largest, by far” in his sector.

Investor Cat Rock Capital Management LP has been lobbying for Just Eat to merge with a rival, arguing that consolidation would be the only way to deliver “real value.” Cat Rock holds a 4.9% stake in Takeaway, according to a filing with Dutch market regulator AFM. It’s stake in Just Eat stands at 2.6%, according to Bloomberg Data.

Aside from Switzerland, there may be little overlap between the two businesses. Just Eat has expanded in Canada and Latin America, while Takeaway.com has recently moved into southeastern Europe and Israel

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