Just Eat jumps 10% after deals, as FTSE rises ahead of US jobs

Discussion in 'Market News' started by Lily, Feb 5, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Online takeaway specialist buys four businesses from rivals

    As markets await the latest US jobs figures, investors are helping pass the time by tucking into Just Eat.

    The online takeaway specialist is up 10% or 36.7p to 396.7p after it announced the purchase of four businesses from rivals Rocket Internet and foodpanda for €125m (£94.7m). The deals involve companies in Spain, Italy, Brazil and Mexico.

    This transaction reflects our ambition to make strategic, value enhancing acquisitions that consolidate our leadership of the global digital marketplace for takeaway food delivery.

    A great deal considering Rocket bought two of those businesses less than a year ago, and their November 2015 valuation had those two alone at €130m. We really like M&A that consolidates a competitive position, and brings forward the path to profitability. Today does exactly that for Just Eat.

    Today’s bolt-on acquisitions are fully in line with the stated strategy and bolster existing leading market positions. On the face of it, the price looks full and there is a question as to whether Just Eat might just have left the businesses to fail. However, we see the deals as positive, with Just Eat taking control of its own destiny and ultimately, if £10m EBITDA is delivered, then the price is reasonable. Recent share price weakness suggests room for a rebound.

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