Shareholders at DP Eurasia have resoundingly rejected a revised takeover offer from Jubilant FoodWorks.
DP Eurasia, the exclusive master franchisee for Domino’s Pizza in Azerbaijan, Georgia and Turkey received a 95p per share bid valuing it at £140million from the Indian food service business on Tuesday.
Jubilant’s Dutch division made an initial approach for DP Eurasia last month after raising its stake in the group from 49 per cent to 53.5 per cent.
Scope: DP Eurasia is Domino’s Pizza’s master franchisee in Azerbaijan, Georgia and Turkey
Its 85p per share deal was rejected for being too low, with DP Eurasia bosses also declaring they were ‘extremely disappointed’ at the ‘unsolicited and opportunistic way’ Jubilant made the offer.
Jubilant subsequently increased its bid by another 10 pence per share on Tuesday, but the DP Eurasia board said the proposal ‘continues to fundamentally undervalue’ the company and its prospects.
Following consultation with major institutional investors, DP Eurasia said there was ‘unanimous agreement’ among them not to support the new deal.
Jubilant, which holds the Domino’s master franchise in India, Bangladesh, Nepal and Sri Lanka, requires backing from three-quarters of shareholders to get the takeover accepted.
The firm added: ‘As long as this status quo is maintained, Jubilant Foodworks cannot, without the support of these shareholders, de-list the company or put in place any of the mechanisms to squeeze out the minority shareholders set out in its offer document.
‘The board intends to use this strength of shareholder support to encourage Jubilant Foodworks to offer a fair price that the board can recommend and that shareholders are willing to accept.’
DP Eurasia was the third-largest pizza delivery business in Russia until quitting the country earlier this year because of the Ukraine war’s escalation.
It was heavily criticised for keeping its restaurants open, which it claimed was to protect staff, long after many other firms had stopped or announced plans to shut down their Russian operations.
After plans to sell its DPRussia subsidiary failed, it decided instead to make the division file for bankruptcy in Russia over the summer.
In its most recent trading update, DP Eurasia reported sales jumped by over a third in the ten months ending October on the back of strong demand in Turkey.
For the full year, the company expects like-for-like sales growth in the ‘high teens, at least 35 to 40 new Domino’s Pizza store openings and 50 to 60 more establishments belonging to its coffee shop brand, COFFY.
DP Eurasia shares were 0.3 per cent up at 93.3p on early Thursday afternoon, about 36 per cent above their value prior to Jubilant’s first takeover offer.
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