PROSUS’S waiting game for Brazilian's largest food delivery platform iFood finally ended in victory as it announced it was going to acquire the remaining 33% stake in for up to €1.5bn in cash (R30.7bn).
The deal comes as meal delivery company Just Eat Takeaway, the owner of iFood, which has seen its share price plummet this year, last year rejected a €2.3bn offer from Amsterdam-listed Prosus, saying it was“ inadequate”.
Prosus, which is already the majority shareholder in iFood, has built a global portfolio of online food delivery companies, including iFood in Latin America, Swiggy in India, and Delivery Hero, which has a presence in about 50 countries. Prosus is also an active investor in adjacent businesses, including Flink, Foodics, Oda, and Sharebite.
iFood has an 80% market share, dominating global operations like UberEats.
Just Eat is a subsidiary of Just Eat Takeaway.com and for the six months ended June 30, 2022, Prosus said, the value of the carrying amount of Just Eat’s interest in iFood was €1.744bn. The loss attributable to Just Eat’s interest in iFood was €62m.
Prosus Chief Executive Bob van Dijk said: "We first invested in iFood nearly a decade ago, and during this time Fabricio and team have built a world-class food delivery business. They have shaped the sector in Brazil, creating a platform that serves 330 000 restaurant partners, provides income opportunity for 200 000 delivery partners and delivers approximately 70 million orders every month."
He said increasing Prosus stake to full ownership was a demonstration of its commitment and disciplined investment approach and reflects its confidence in the long-term potential of iFood.
"Together we will build a platform of offerings that provide Brazilian customers, delivery partners, restaurants, and more, with the best experience in food, grocery delivery, and fintech," Van Dijk said.
Prosus entered into it through its affiliate MIH Movile Holdings plans to acquire the remaining 33.3% stake in iFood Holdings and IF-JE Holdings, if the shareholders approve the deal, and from minority shareholder Just Eat Holding for €1.5bn in cash, will acquire the stake from Just Eat Takeaway.com for €1.5bn in cash plus a “contingent consideration” of up to €300m.
"Today, Prosus has a broad global perspective on the food delivery industry with a presence in 57 markets globally. Prosus is well-positioned at the forefront of the transformation that is happening across the food delivery value chain -- from how food is sourced, to how it is prepared and consumed," it said.
David Eborall, a portfolio manager at SaltLight Capital Management, on twitter said, “ So $TKWY has to sell iFood far below their previous offer of €2.5bn. Prosus getting a good deal here.
“A hat tip to Prous who were disciplined at waiting this out. I didn’t think they would do it but they got iFood at a great price,” Eborall said.
Portfolio manager and strategist at PSGInvest, Schalk Louw, said on Twitter: "For years I've been hard on #Naspers/#Prosus management. On March 25, 2019, Naspers announced unbundling of Prosus with the objective: "help to maximise shareholder value over time". They were off to a rocky start, and NewCombo seriously underperformed #Tencent. That's now changed.“
Prosus shares rose to a 3% high on Friday after the news, later closing at R1 080, but have decreased by almost 12% in the past year.
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