Just Eat and Dutch rival Takeaway.com are merging to create one of the biggest online food delivery companies in the world, both firms have revealed.
The £9 billion deal will see the Amsterdam-based firm buy Just Eat at 731p a share, valuing the British business at £5 billion – a 15% premium on the share price on Friday.
But investors appeared to believe a rival bid could be in the offing, with shares soaring 156p, or 25%, to 791.6p – significantly above the offer price.
Canaccord analyst Nigel Parson said: “It is a possibility that Delivery Hero could table a rival bid.”
The boards of Just Eat and Takeaway.com have recommended the merger is accepted by shareholders, pointing out that the combined group had 360 million orders worth 7.3 billion euro (£6.6 billion) in 2018.
The new entity will remain listed on the London Stock Exchange, but will be headquartered in Amsterdam with a “significant” operation in the UK.
Jitse Groen, Takeaway.com’s chief executive, is to become the boss of the new company, with Just Eat’s interim chief Peter Duffy leaving.
It is a possibility that Delivery Hero could table a rival bidNigel Parson, Canaccord Genuity
Just Eat chairman Mike Evans will remain in place and Takeaway.com chairman Adriaan Nuhn becomes vice-chairman.
Mr Groen has described the UK as one of the best three markets in Europe, along with the Netherlands and Poland.
His business was founded in 2000 and operates in 10 countries in Europe, alongside Israel and Vietnam.
Just Eat can be found in the UK, Australia, New Zealand, Canada, Denmark, France, Ireland, Italy, Mexico, Norway, Spain, Switzerland and Brazil.
The deal is expected to be seen as a major victory for activist investor Cat Rock, which has a 2.6% stake in Just Eat and owns 4.9% in Takeaway.com.
Bosses at the US-based investment house have publicly criticised Just Eat in the past for not having enough experience and questioned the board’s decisions over appointments, particularly former chief executive Peter Plumb.
They also warned that the rise and rise of Deliveroo and Uber Eats could also eat into their business without a merger.
Alex Captain, founder and managing partner, Cat Rock, said: “The proposed transaction is excellent news for Just Eat shareholders.
“The combined company would be an exceptionally high-quality business with formidable market positions in major countries, fantastic growth prospects, and world-class management.
“We would like to commend Chairman Mike Evans and the board for taking clear and decisive action to realise Just Eat’s great potential.”
Deals and consolidation in the food delivery sector have been a mainstay of recent years.
Just Eat bought UK rival HungryHouse in 2018 and last December Takeaway.com snapped up Delivery Hero’s German business.
Uber Eats and Deliveroo had initial discussions about a possible takeover by Uber, although the conversations ended without a deal.
Amazon has also invested heavily in Deliveroo, leading a recent £450 million funding round, although the deal is now with the competition authorities for approval.
Analysts at Barclays said: “Just Eat shareholders would be getting the best operator in the space to run the business – a notable shift from missed execution from management in the last few years.”