Did Just Eat keep its profits LOW to get a better deal in France?

That’s the claim in court fight as takeaway giant plans £9 billion merger

TAKEAWAY giant Just Eat has been accused of deliberately keeping profit slow at its French division in order to put the squeeze on one of its former business partners.

Just Eat entered the French market in 2011 when it bought a 50 per cent stake in FBA Invest – which owned AlloResto – from entrepreneur Sébastien Forest.

The firm acquired a further 30 per cent in 2014 for €7 million (£6 million). However, its efforts to buy the remaining 20 per cent were spurned when Forest launched a £10 million claim in a French court amid a dispute about how much Just Eat should pay for the stake.

The court case comes at an awkward time for the FTSE 100 company, which is at the centre of a bidding battle. Just Eat has agreed to a £9 billion merger with Amsterdam- l i sted Takeaway. com that would create the largest takeaway business outside of China and allow it to overtake Uber Eats.

However, the deal is under threat after Prosus, the Dutch arm of South African technology giant Naspers, gatecrashed the deal with a hostile bid and is pressing ahead with its £4.9 billion approach despite it being rejected by Just Eat. The value of Takeaway. com’s shares has slumped since the tie-up was struck in the summer.

Details of Forest’s claim emerged in Takeaway.com’s prospectus for its merger with Just Eat, published last week. Takeaway.com says Forest claimed the mechanics to determine the price Just Eat should pay for the rest of AlloResto were ‘not fit for purpose’.

The French businessman also claimed that Just Eat has ‘unfairly suppressed the profitability of FBA in order to reduce the amount of consideration payable for t he remaining FBA shares’.

Forest is claiming up to £10 million for the remaining 20 per cent, valuing the overall French division at £50 million. Just Eat is understood to have made provisions in case it loses the case.

Takeaway. com said in the prospectus: ‘Just Eat’s current assessment is that a successful claim in favour of Mr Forest is unlikely.’

Forest founded AlloResto in 1998. The firm was renamed Just Eat as part of a rebrand last year. It made revenues of £37.1 million in 2018 and pre-tax profits of £3 million.

Takeaway.com’s offer is due to be voted on by shareholders at a meeting on December 4.

Last week, hedge fund Cat Rock Capital, which has stakes in both Just Eat and Takeaway. com, accused Prosus of trying to undermine the rival bid. Cat Rock claimed rival takeaway service Delivery Hero, in which Prosus has a 22 per cent stake, was selling down shares in Takeaway.com to knock the price lower ahead of the vote.

Just Eat and Takeaway. com declined to comment while Forest could not be reached.