Just Eat Takeaway will sell its stake in iFood, the title flies away | Photo credits: Just Eat Takeaway.com
Aug 19 (Reuters) – Just Eat Takeaway stock soared 25% on the Amsterdam Stock Exchange on Friday to top the Stoxx 600 after the food delivery company announced the sale of its 33% stake in the Brazilian company iFood in Prosus.
Dutch tech investment group Prosus has said it intends to take control of Brazilian company iFood for 1.5 billion euros in cash, plus an additional “consideration” of up to 300 million euros. The transaction is expected to close in the fourth quarter.
Jitse Groen, the general manager of Just Eat Takeaway had refused an offer for iFood at 2.3 billion euros in August 2021, deeming it “inadequate”, while the valuation of collective catering companies soared in the context of the coronavirus pandemic.
As of Thursday’s close, the Just Eat Takeaway stock had lost 65% of its value since the start of the year.
“While she likely would have preferred to retain her stake, the financial benefits of the sale were clearly too great to ignore. A clear upside for stocks today,” Jefferies analysts said in a note.
Credit Suisse views the deal as positive for Prosus as well as Just Eat Takeaway, given its current valuation.
Clément Genelot, an analyst at Bryan Garnier, believes it looks like a panic sell because Just Eat Takeaway knew it was going to run out of cash by early 2024.
The proceeds from the sale will eliminate any funding problems, but the likelihood of a return to shareholders through a special dividend or share buybacks appears low, he added. (Reporting Elena Vardon, editing by Kate Entringer)