Dec 9, 2019
Prosus £5bn bid for Just Eat shows price of competition
This led Cat Rock Capital, an investor in both food groups, to suggest that Just Eat was worth "At least 5 times 2020 consensus revenue" - which is the multiple of 2019 revenue it currently trades on. People familiar with Prosus's mutterings pointed out that Just Eat shares were worth only £5.89 the day before the Dutch group bid. This led advisers to add that even that £5.89 price was inflated by Takeaway.com's earlier offer - so Prosus's latest bid actually represented a standard 30-40 per cent takeover premium to Just Eat's true undisturbed share price. With relatively limited food delivery competition in Germany and the Netherlands, Takeaway.com's market price has averaged 8.3 times its revenue since 2016. In the US fierce competition from 1P players such as Uber has cut Grubhub's multiple to just 2.6 times estimated 2020 revenue, and 2.3 times 2021 revenue.
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