Delivering to hungry investors


Just Eat is the kind of company you are happy to have invested in.

Created in the Netherlands in 2000, the online food delivery company developed a very healthy local franchise, before embarking on two major acquisitions over the last two years that have swept the company into a leading position in Europe.
The first company to be acquired was Germany’s Delivery Hero, a purchase in 2018 that was refinanced a year later with a €680m equity and equity-linked placement that included a €430m capital increase and a €250 million convertible bond, on which Societe Generale acted as global coordinator and joint bookrunner. Subsequently, an all-share combination with UK’s Just Eat Plc that closed in January 2020 ensured an increase in the company’s market capitalisation from around €3 billion prior to the merger to near €14 billion today.

After the market close on 22 April 2020, Just Eat repeated the combined offering of the previous year – this time the convertible was €300 million and the ABB €400 million – with the proceeds destined to partially pay down revolving credit facilities utilised by both Just Eat and, for general corporate purposes, as well as to provide the company with the financial flexibility to act on strategic opportunities.

Just Eat shares have traded up approximately 10% since the beginning of this year, rocketing up by close to 45% since the equity markets troughed when the Covid 19 crisis struck in Europe at the beginning of March. The attraction of the company’s shares was such that the 2.25% coupon (and 35% conversion premium) offered on last year’s convertible was slimmed down in the latest issue to 1.25% (with an improved, 40% conversion premium), the tight end of the 1.25%-2% price range, with the orderbook multiple-times subscribed, despite market turmoil due to the pandemic. 
Societe Generale acted as global coordinator and joint bookrunner of the convertible bond, in the same set-up that had brought about the successful execution of last year’s transaction. 

We had the experience of a successful execution already, and the collaboration of the banks in the syndicate was great,

Alona Domnina,
director in CEEMEA corporate finance at Societe Generale in London.

The investors in the latest deal were similar to those that bought in 2019, their decision made easier by the dramatic improvement in the online delivery company’s fortunes over the last 12 months. “Investors anticipate that Just East is going to be one of the winning companies in this crisis”, according to Ms Domnina. “Offering a potential conversion into equity in the future with a 40% premium over this company’s share price via a convertible bond is an attractive proposition.

While the largest group of investors in the latest convertible bond was from the UK, French investors are generally the largest buyers of convertibles. Historically, this product was originated by the French banks because of the strength of their equity derivatives franchises.

Societe Generale is one of the largest arrangers of convertible bonds in the Europe, Middle East and Africa region, ranking fourth in the number of new issues between 2019 and 2020 year-to-date with a 5.3% market share, according to Dealogic.