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Recommended all-share combination of Takeaway.com N.V. and Just Eat plc

Summary

  • The boards of Takeaway.com N.V. ("Takeaway.com") and Just Eat plc ("Just Eat") are pleased to announce that they have reached agreement on the terms of a recommended all-share combination to be effected by means of a scheme of arrangement between Just Eat and the Just Eat Shareholders under Part 26 of the Companies Act 2006 (the "Combination").
  • Upon completion of the Combination, it is intended that the name of the Combined Group will be Just Eat Takeaway.com N.V. The Combination would create one of the largest food delivery companies in the world, with scale, strategic vision, industry-leading capabilities, leading positions in attractive markets and a diversified geographic presence.
  • The Just Eat Board and Takeaway.com Management Board believe that the Combination has compelling strategic logic and represents an attractive opportunity for both companies to build on the strong individual platforms of Just Eat and Takeaway.com with the potential to deliver substantial benefits to respective shareholders, consumers, employees and other stakeholders.

The Combination

  • Under the terms of the Combination, Just Eat Shareholders will be entitled to receive: 0.09744 New Takeaway.com Shares in exchange for each Just Eat Share
  • Immediately following completion of the Combination, Just Eat Shareholders will own approximately 52.15% and Takeaway.com Shareholders will own approximately 47.85% of the share capital of the Combined Group (based on the fully diluted ordinary issued share capital of Takeaway.com (but excluding dilution from any conversion of the Takeaway.com Convertible Bonds) and the fully diluted share capital of Just Eat, in each case as at the date of this Announcement).
  • The Just Eat Board and the Takeaway.com Management Board believe that the Combination is a highly compelling opportunity to create a combined business that will benefit from:
    • creating one of the world's largest online food delivery platforms with 355 million orders[1] worth €7.3 billion in 2018[2];
    • a strong, founder-led management team with 40 years of combined experience in the sector;
    • strong leadership positions in many of the world's largest food delivery markets, including the United Kingdom, Germany, the Netherlands and Canada;
    • a platform built around two of the world's largest profit pools in food delivery, the United Kingdom and the Netherlands;
    • ability to deploy capital and resources to strengthen its competitive positions as the Combined Group determines appropriate; and
    • operating leverage: greater ability to leverage investments, in particular in technology, marketing and restaurant delivery services across the combined business.
  • The terms of the Combination imply a value for Just Eat of 731 pence per Just Eat Share based on Takeaway.com's closing share price on 26 July 2019 of €83.55. This value represents a premium of 15% to Just Eat's closing share price on 26 July 2019 (being the last Business Day before the date on which Takeaway.com and Just Eat announced a possible all-share combination).
  • Following preliminary analysis undertaken by the Takeaway.com Management Board and the Just Eat Board, meaningful cost benefits have been identified which reinforce the strategic rationale for the Combination and the value creation opportunity for shareholders of the Combined Group. The key driver of the identified synergies is the efficiency opportunities that the Combined Group will be able to realise given the complementary nature of the businesses.
  • The Takeaway.com Management Board and the Just Eat Board, having reviewed and analysed the potential cost benefits of the Combination, and taking into account the factors they can influence, believe that the Combination will result in recurring annual pre-tax cost benefits of approximately €20 million (£18 million) by the fourth anniversary of the completion of the Combination, with around €10 million (£9 million) expected by the first anniversary of the completion of the Combination[3].

The Combined Group

  • Following completion of the Combination, it is intended that the Combined Group will have a two-tier board structure. Takeaway.com and Just Eat believe that an experienced Management Board with a clear track record, combined with effective oversight from a proven and engaged Supervisory Board, will be important to deliver the opportunities presented by the Combination. The Combined Group will draw on the array of talent and experience in both companies to drive the business forward. In this regard, the Management Board and Supervisory Board of the Combined Group will comprise a mixture of members from the Takeaway.com Boards and from the Just Eat Board, namely:
    • for the Management Board of the Combined Group:
      • Jitse Groen, currently CEO of Takeaway.com, will assume the role of CEO of the Combined Group;
      • Paul Harrison, currently CFO of Just Eat, will assume the role of CFO of the Combined Group;
      • Brent Wissink, currently CFO of Takeaway.com, will assume the role of Co-COO of the Combined Group; and
      • Jörg Gerbig, currently COO of Takeaway.com, will assume the role of Co-COO of the Combined Group; and
    • for the Supervisory Board of the Combined Group:
      • Mike Evans, currently the chairman of Just Eat, will assume the role of chairman of the Supervisory Board;
      • Adriaan Nühn, currently the chairman of the Takeaway.com Supervisory Board, will assume the role of vice-chairman of the Supervisory Board and senior independent non-executive director of the Combined Group;
      • three independent non-executive members identified by Just Eat;
      • two non-executive members identified by Takeaway.com, including one member nominated by Gribhold; and
      • where Delivery Hero is entitled to, and has exercised its right to, nominate for appointment one independent Supervisory Board member under the existing relationship agreement between Takeaway.com and Delivery Hero, such independent member as nominated by Delivery Hero and one additional member nominated by the Supervisory Board[4].
  • Further details on the proposed governance structure for the Combined Group are set out in paragraph 12 of this Announcement.
  • The Combined Group will be headquartered and domiciled in Amsterdam, the Netherlands. The Combined Group also intends to maintain a number of Just Eat's current headquarter functions in London. The Combined Group intends to maintain its current locations of operations, with a significant part of its operations in the United Kingdom, including its existing operations in London, Borehamwood and Bristol. A full assessment of the Combined Group's other locations has not yet been conducted, and as a result, there are no specific plans in relation to these other locations.
  • As part of the Combination, Takeaway.com intends to seek approval for the listing and admission to trading of the enlarged share capital of the Combined Group, comprising the Existing Takeaway.com Shares and the New Takeaway.com Shares, on the Premium Segment of the London Stock Exchange's Main Market for listed securities, the listing and admission to trading of the New Takeaway.com Shares on Euronext Amsterdam and inclusion of the Combined Group in the FTSE 100 Index and FTSE All-Share Index.
  • Based on initial discussions with FTSE, Takeaway.com and Just Eat anticipate that the Combined Group would be eligible for inclusion in the FTSE 100 Index and the FTSE All-Share Index from completion of the Combination.

Combination details and recommendations

  • The Just Eat Directors, who have been so advised by Goldman Sachs and Oakley Advisory as to the financial terms of the Combination, consider the terms of the Combination to be fair and reasonable. Goldman Sachs and Oakley Advisory are providing independent financial advice to the Just Eat Directors for the purposes of Rule 3 of the City Code. In providing their financial advice to the Just Eat Directors, Goldman Sachs and Oakley Advisory have taken into account the commercial assessments of the Just Eat Directors.
  • Accordingly, the Just Eat Directors intend to recommend unanimously that Just Eat Shareholders vote in favour of the Scheme at the Court Meeting and the Just Eat Resolutions at the Just Eat General Meeting, as the Just Eat Directors who hold Just Eat Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of, in aggregate, 660,476 Just Eat Shares, representing approximately 0.10% of the ordinary issued and to be issued share capital of Just Eat on 2 August 2019, being the last Business Day before the date of this Announcement. Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.
  • Pursuant to Dutch law and the Takeaway.com Articles of Association, various resolutions of Takeaway.com will need to be passed in order to approve, effect and implement the Combination. These Takeaway.com Resolutions consist of resolutions for: (i) the approval by the Takeaway.com EGM of the Combination within the meaning of 2:107a DCC; (ii) the delegation to the Takeaway.com Management Board of the right to issue the New Takeaway.com Shares; (iii) the delegation to the Takeaway.com Management Board of the right to exclude or limit pre-emptive rights in connection with the issue of the New Takeaway.com Shares; (iv) the amendment of the Takeaway.com Articles of Association including amendment to implement the new governance structure of the Combined Group; (v) the appointment of new members to the Management Board (subject to the implementation of the Combination); and (vi) the appointment of new members to the Supervisory Board (subject to the implementation of the Combination). All Takeaway.com Resolutions require a simple majority of the votes cast to be passed, provided that if less than half of the issued share capital of Takeaway.com is represented at the Takeaway.com EGM, Takeaway.com Resolution (iii) above requires a two-thirds majority of the votes cast to be passed.
  • The Takeaway.com Boards consider the Combination to be in the best interests of Takeaway.com and all of its stakeholders, including the Takeaway.com Shareholders as a whole, and the Takeaway.com Boards intend to recommend unanimously that the Takeaway.com Shareholders vote in favour of the Takeaway.com Resolutions at the Takeaway.com EGM, as the Takeaway.com Managing Directors who hold Takeaway.com Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of, in aggregate, 574,486 Takeaway.com Shares, representing approximately 0.94% of the ordinary issued and to be issued share capital of Takeaway.com on 2 August 2019, being the last Business Day before the date of this Announcement. In addition, Gribhold, the personal holding company of Jitse Groen, has irrevocably undertaken to vote in favour of the Takeaway.com Resolutions at the Takeaway.com EGM in respect of a total of, in aggregate, 15,318,766 Takeaway.com Shares, representing approximately 25.03% of the ordinary issued and to be issued share capital of Takeaway.com on 2 August 2019, being the last Business Day before the date of this Announcement and to provide its prior written consent to the amendments to the Takeaway.com Articles of Association to be proposed to the Takeaway.com EGM which are required to give effect to the Combination. The Takeaway.com Supervisory Directors do not hold any Takeaway.com Shares. Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.
  • Takeaway.com has received financial advice from BofA Merrill Lynch (as financial adviser) in relation to the Combination. In providing its financial advice to Takeaway.com, BofA Merrill Lynch has relied upon the commercial assessments of the Takeaway.com Management Board. In addition, the Takeaway.com Supervisory Board has received financial advice from Lazard in relation to the Combination. In providing its financial advice to the Takeaway.com Supervisory Board, Lazard has relied upon the commercial assessments of the Takeaway.com Management Board and the Takeaway.com Supervisory Board on the Combination.
  • It is intended that the Combination will be effected by means of a Court-sanctioned scheme of arrangement of Just Eat under Part 26 of the Companies Act 2006, further details of which are contained in the full text of this Announcement (and will be included in the Scheme Document). Takeaway.com reserves the right to implement the Combination by way of an Offer, subject to the Panel's consent and the terms of the Co-operation Agreement.
  • In addition to being subject to the approval of the Takeaway.com Shareholders and Just Eat Shareholders, the Combination is also subject to, inter alia, completion of the Works Council Consultation Procedure by Takeaway.com in the Netherlands.

Irrevocable undertakings

  • Takeaway.com has received irrevocable undertakings from the Just Eat Directors who hold Just Eat Shares to vote in favour of the Scheme at the Court Meeting and the Just Eat Resolutions at the Just Eat General Meeting in respect of a total of, in aggregate, 660,476 Just Eat Shares, representing approximately 0.10% of the ordinary issued and to be issued share capital of Just Eat on 2 August 2019, being the last Business Day before the date of this Announcement. Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.
  • Just Eat has received irrevocable undertakings from the Takeaway.com Managing Directors who hold Takeaway.com Shares to vote in favour of the Takeaway.com Resolutions at the Takeaway.com EGM in respect of a total of, in aggregate, 574,486 Takeaway.com Shares, representing approximately 0.94% of the ordinary issued and to be issued share capital of Takeaway.com on 2 August 2019, being the last Business Day before the date of this Announcement. In addition, Just Eat has received an irrevocable undertaking from Gribhold, the personal holding company of Jitse Groen, to vote in favour of the Takeaway.com Resolutions at the Takeaway.com EGM in respect of a total of, in aggregate, 15,318,766 Takeaway.com Shares, representing approximately 25.03% of the ordinary issued and to be issued share capital of Takeaway.com on 2 August 2019, being the last Business Day before the date of this Announcement and to provide its prior written consent to the amendments to the Takeaway.com Articles of Association to be proposed to the Takeaway.com EGM which are required to give effect to the Combination. The Takeaway.com Supervisory Directors do not hold any Takeaway.com Shares. Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.

Timing

  • The Scheme Document will include further details of the Scheme, together with notices of the Court Meeting and the Just Eat General Meeting and the expected timetable, and will specify the actions to be taken by Just Eat Shareholders.
  • Given the time required to complete the Works Council Consultation Procedure by Takeaway.com in the Netherlands and to prepare the Just Eat Takeaway.com Prospectus required to implement the Combination, it is expected that the Scheme Document and Takeaway.com Circular will be published by 23 October 2019. It is expected that the Scheme Document, including the Scheme and notices of the Court Meeting and Just Eat General Meeting, will be posted to Just Eat Shareholders (together with Forms of Proxy) and, for information purposes only, to persons with information rights and to holders of options and awards granted under the Just Eat Share Plans in accordance with a timetable agreed between Just Eat and Takeaway.com from time to time, such that the Court Meeting and Just Eat General Meeting will be convened for no later than 20 December 2019 (or such other date as may be agreed by Just Eat and Takeaway.com subject to the Panel's consent). The Takeaway.com EGM will be held at or around the same time and on the same date as the Court Meeting and the Just Eat General Meeting and in any event no later than 20 December 2019 (or such other date as may be agreed by Takeaway.com and Just Eat, subject to the Panel's consent. For the purposes of paragraph 3(a) of Appendix 7 to the City Code, the Panel has consented to an extension of the applicable date for posting, such that Just Eat may post the Scheme Document by 23 October 2019.
  • In addition, it is expected that the Just Eat Takeaway.com Prospectus containing information about the Existing Takeaway.com Shares and New Takeaway.com Shares will be published at or around the same time as the Scheme Document is posted to Just Eat Shareholders.
  • The Scheme Document, the Just Eat Takeaway.com Prospectus and the Takeaway.com Circular will each be made available by Takeaway.com on its website at http://corporate.takeaway.com and by Just Eat on its website at www.justeatplc.com.
  • The Scheme is expected to become effective in Q4 2019, subject to satisfaction or (where applicable) waiver of the Conditions and certain further terms set out in Appendix I to this Announcement.

Commenting on today's Announcement, Jitse Groen, the CEO of Takeaway.com said:

"The Combination of Just Eat and Takeaway.com creates one of the world's largest and most powerful food delivery websites. It will become a formidable company that will make an impact on tens of millions of consumers across the globe; it will be at the forefront of product and tech development in the sector, and it will lead the way in its relationship with its consumers, restaurant partners, its staff, and its delivery drivers. It is a dreamed combination, created by the sector's dream team, and I can only be grateful for the opportunity of leading it."

Commenting on the Combination, Mike Evans, the Chairman of Just Eat said:

"The Board believes that this is a compelling offer for Just Eat shareholders which will create a global leader in a dynamic and rapidly growing sector. Our businesses have a shared philosophy and culture, and together we will create one of the world's largest online food delivery platforms with leading positions in key markets. With a significant commitment to the UK and to the employees of Just Eat, we believe the new combination and proven leadership team will allow us to better serve our millions of consumers and thousands of restaurant partners around the world. Just Eat will be a driving force in the creation of an exciting global leader and I am looking forward to working with Jitse and the talented Takeaway.com team to seize this opportunity together."

Analyst and investor presentations

There will be an analysts' briefing at 10.30 a.m. (London time) today at Goldman Sachs International, River Court, 120 Fleet Street, London, EC4A 2BE. There will also be a live audio webcast of this briefing. Information on how to access the live audio webcast can be found at http://corporate.takeaway.com and www.justeatplc.com.

The recorded audio webcast (together with the accompanying slides) will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, in due course on Takeaway.com's website at http://corporate.takeaway.com and Just Eat's website at www.justeatplc.com. The contents of the websites referred to in this Announcement are not incorporated into and do not form part of this Announcement.

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices).

The Combination will be subject to the Conditions and further terms set out in Appendix I to this Announcement, and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the bases of calculations and sources of certain information contained in this Announcement. Appendix III to this Announcement contains details of the irrevocable undertakings received in relation to the Combination. Appendix IV to this Announcement sets out the anticipated Quantified Financial Benefits Statement and contains details of, and bases of calculation of, the anticipated financial benefits of the Combination. Appendix V to this Announcement contains details of Just Eat's expectations with respect to full year 2019 revenue and uEBITDA. Appendix VI to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

1 Excluding Just Eat’s operations in Brazil and Mexico.

2 Pro forma for the acquisition of Delivery Hero Germany and 10bis in Israel as if they were consolidated for the 12 months of 2018.

3 This statement constitutes a quantified financial benefits statement for the purposes of the City Code. Please see Appendix IV for further details.

4 Pursuant to the existing relationship agreement between Takeaway.com and Delivery Hero, Delivery Hero has the right to nominate for appointment one independent Supervisory Board member if it holds 9.99% or more of the issued and outstanding share capital of Takeaway.com. If, following completion of the Combination, Delivery Hero holds less than 9.99% of the issued and outstanding share capital of Takeaway.com, then, pursuant to the terms of the existing relationship agreement and unless the Takeaway.com Supervisory Board unanimously decides otherwise, Delivery Hero’s Supervisory Board nominee shall resign from his position effective as of no later than the first general meeting of Takeaway.com that is convened thereafter. If, following completion of the Combination, Delivery Hero holds 9.99 or more (or subsequently increases its holding such that it holds 9.99% or more) of the issued and outstanding share capital of Takeaway.com, then, pursuant to the terms of the existing relationship agreement, Delivery Hero again has the right to nominate for appointment one independent Supervisory Board member. For such time as Delivery Hero is entitled to, and does, nominate for appointment one independent Supervisory Board member, the Supervisory Board may resolve to nominate a further additional member for appointment to the Supervisory Board and as such expand the size of the Supervisory Board to 9 members.

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