Tech investor Prosus on Friday said it would pay up to EUR 1.8 billion (about Rs 14,500) to buy a 33% stake in iFood Brazil from rival Just Eat Takeaway.com, which it does not yet own. The deal will give Prosus sole control of iFood, considered one of the most lucrative food delivery businesses in one of the world’s largest markets. It also gives Takeaway, which is racing to turn a profit, an important source of money.
Prosus said it would pay €1.5 billion (approximately Rs 12,100) in cash and consider adding up to EUR 300 million (approximately Rs 2,400) for a 33 percent stake in iFood. That’s about half the market capitalization of Takeaway, Europe’s largest meal delivery company, and more than rival Deliveroo’s market value.
“Increasing our shares to full ownership is a testament to our committed and disciplined approach to investing and reflects our belief in iFood’s long-term potential.” Prosus CEO Bob van Dijk said in a statement.
Takeaway, whose shares have lost two-thirds of their value in the past year, have long sought to sell shares of iFood, but have been unable to reach terms.
While they were partners in iFood, Prosus and Takeaway fought a fierce battle to take over Just Eat in 2020, which Takeaway ultimately won.
Takeaway CEO Jitse Groen said in August 2021 he had rejected an offer of EUR 2.3 billion (approximately Rs 18,500) for iFood from an unnamed bidder as “not enough”, due to Meal companies’ valuations skyrocketed amid the COVID-19 pandemic.
The price Takeaway is receiving now “represents more than five times the equity” of the company’s investments, it said.
According to a disclosure in Takeaway’s half-year results last month, iFood posted a net loss of around EUR 120 million (Rs 1,000) in the first half of 2022, despite a 28% increase in revenue. Prosus says iFood makes about 70 million deliveries per month.
Takeaway said it expects the iFood deal to close in the fourth quarter, and it is continuing to explore a “partial or full sale” of Grubhub, the US food delivery company it bought last year with for $7.3 billion (about Rs 58,200).
© Thomson Reuters 2022
