By Paul Sandle
LONDON (Reuters) - Just Eat <JE.L> backed a final 5.5 billion pound ($7.2 billion) all-share offer from Takeaway.com on Friday, saying a tie-up to create one of the leading online food delivery companies was more compelling than a rival cash bid from Prosus.
Takeaway <TKWY.AS> and Prosus <PRX.AS> both raised their bids for the British company on Thursday, with Amsterdam-listed Takeaway's all-share offer trumping the 800 pence a share offered by Prosus at its current stock price.
"The board of Just Eat continues to believe that the combination with Takeaway.com is based on a compelling strategic rationale that allows shareholders to participate in the upside potential of the enlarged group," Just Eat said.
Takeaway has received valid acceptances and commitments from the holders of 46% of Just Eat's equity, putting it within touching distance of the 50% plus one share it needs to win.
And in a further sign that the momentum is with Takeaway, Prosus said it was not planning to buy shares in the market.
"We have always stated that we would remain disciplined with respect to price on acquiring Just Eat," Prosus CEO Bob van Dijk said, noting a need to balance the future investment required to grow the business with acceptable returns for his shareholders.
Takeway sweetened its bid to give Just Eat shareholders about 57.5% of the combined group, implying a 916 pence value for each Just Eat share, based on Takeaway's closing share price of 88.90 euros on Wednesday.
Takeaway's shares have fallen since, but the 78 euro level they were trading at on Friday still puts its bid slightly ahead of Prosus, with an implied value of 803 pence a share.
Analysts at Barclays said Takeaway's shares would need to fall below 77 euros for its implied offer to fall below Prosus.
While the stock could come under some pressure, they said, "reasonably positive" trading comments in its final bid document should be a decent support.
Just Eat's shares followed Takeaway's drift lower on Friday to trade down 2.8% at 789 pence at 1455 GMT.
By making final bids, the two rival Dutch companies avoided taking part in an auction shortly after Christmas.
Shareholders in Just Eat have until Jan. 10 to accept either offer, while Takeaway's shareholders will vote on Jan. 9.
Just Eat said the holding company of founder and CEO Jitse Groen, which has a 25% stake, and the company's managing directors had pledged to support the deal.
(Editing by David Clarke, Elaine Hardcastle and Alexander Smith)