ACTIVIST investor Cat Rock has said it will throw its weight behind Just Eat's Takeaway.com merger unless Prosus raises its offer to 925p per share.

The Dutch food delivery firm has had accepted a £5bn bid for Just Eat but tech group Prosus has come in with a rival 710p per share offer.

However, Cat Rock said in a letter to fellow shareholders yesterday Prosus had overplayed Just Eat's challenges as a way to justify a low-ball bid.

Instead Prosus should offer 925p per share, equivalent to five times Just Eat's expected 2020 revenue.

"While we are pleased that Prosus has bid for Just Eat, we are deeply disappointed with both the level of their offer and their approach to the bidding process," Cat Rock founder Alex Captain said. "Instead of offering a fair price for Just Eat, Prosus has made a number of claims about Just Eat and Takeaway.com aimed at convincing shareholders not to support their merger."

Captain added that a combined Just Eat-Takeaway.com food delivery giant could achieve a 1,200p per share valuation in 2020.

Cat Rock, which owns a 2.6 per cent stake in Just Eat, warned there is a "significant risk" that Prosus could reduce the acceptance threshold to 50 per cent and one share. That could leave shareholders who vote against the deal as minority investors in a firm mostly owned by Prosus.

Captain argued that could make shareholders feel like they had little choice but to accept a Prosus bid below fair value.

Just Eat has urged investors not to accept the offer from the internet giant, controlled by South African investment behemoth Naspers. Just Eat shares rose slightly to 765p on the announcements yesterday.

(c) 2019 City A.M., source Newspaper