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Investing.com -- Jefferies has downgraded Just Eat Takeaway.com (AS:TKWY) to a "hold" rating following Prosus (OTC:PROSF)’ acquisition offer and JET’s results.
The revised rating reflects the high probability of a successful takeover and limited upside potential for JET’s stock.
Prosus has made a recommended offer to acquire JET at €20.30 per share, valuing the deal at €4.1 billion.
This represents a 49% premium to online food ordering and delivery company’s three-month volume-weighted average price.
The JET board, including CEO Jitse Groen, has unanimously recommended the offer, citing it as being in the best interests of all stakeholders.
As part of the agreement, JET will retain its name and brands while adhering to non-financial covenants related to strategy, governance, and ESG commitments for two years post-acquisition.
JET’s FY24 results were released alongside the acquisition announcement. The company has adjusted its reporting structure following the sale of its US operations in January 2025.
Group-level Gross Transaction (JO:TCPJ) Value for FY24 grew by 1.2%, driven by a 4% increase in the UK and Ireland and 3.5% growth in Europe.
However, revenue was slightly below consensus estimates, and free cash flow guidance for FY25 fell short of market expectations.
Jefferies has revised its estimates for JET, maintaining largely unchanged revenue projections but cutting adjusted EBITDA estimates by up to 18.7% for FY25-FY27.
This reflects increased investments in key markets such as the UK and Germany. The brokerage’s discounted cash flow (DCF)-based valuation now stands at €21.30 per share, down from €22.50.
However, given the high likelihood of deal completion, Jefferies has set its new price target at the offer price of €20.30.
With JET’s share price nearing the offer price, Jefferies sees limited potential for further upside. The Prosus deal implies a FY26 EV/EBITDA multiple of approximately 7x, compared to US and European peers at 18x and 6.7x, respectively. If the deal fails, Jefferies estimates JET’s downside risk to €13.60 per share.