Item 8.01 Other Events
Certain Litigation Relating to the Merger
As previously announced, Grubhub Inc., a Delaware Corporation ("Grubhub"),
entered into an Agreement and Plan of Merger, dated as of June 10, 2020 (as
amended on September 4, 2020 and March 12, 2021, the "Merger Agreement"), with
Just Eat Takeaway.com N.V., a public company with limited liability (naamloze
vennootschap) incorporated under the laws of the Netherlands ("Just Eat
Takeaway.com"), Checkers Merger Sub I, Inc., a Delaware corporation and wholly
owned subsidiary of Just Eat Takeaway.com, and Checkers Merger Sub II, Inc., a
Delaware corporation and wholly owned subsidiary of Just Eat Takeaway.com,
pursuant to which Just Eat Takeaway.com will acquire Grubhub in an all-share
combination in accordance with the Merger Agreement (the "Transaction").
In connection with the Transaction, fourteen complaints have been filed by
alleged shareholders of Grubhub (collectively, the "Shareholder Complaints"):
Wang v. Grubhub, Inc., et al., Case No. 1:21-cv-3756, Ferreiro v. Grubhub Inc.,
et al., Case No. 1:21-cv-03945 (the "Ferreiro Complaint"), Dennis v. Grubhub
Inc., et al., Case No. 1:21-cv-03983, Johnson v. Grubhub Inc., et al., Case No.
1:21-cv-04104, Brown v. Grubhub Inc., et al., Case No. 1:21-cv-04118 (the "Brown
Complaint"), Langlois v. Grubhub Inc., et al., Case No. 1:21-cv-04369 (the
"Langlois Complaint"), Litwin v. Grubhub Inc., et al., Case No. 1:21-cv-04581,
Heilmeier v. Grubhub Inc., et al., Case No. 1:21-cv-04687, Luftig v. Grubhub
Inc., et al., Case No. 1:21-cv-04704 and Ryan v. Grubhub Inc., et al., Case No.
1:21-cv-04865 are individual actions that were filed in the United States
District Court for the Southern District of New York (the "Litwin Complaint");
Carrier v. Grubhub Inc., et al., Case No. 1:21-cv-02508 and Lowinger v. Grubhub
Inc., et al., Case No. 1:21-cv-02743 (the "Lowinger Complaint") are individual
actions that were filed in the United States District Court for the Eastern
District of New York; Williams v. Grubhub Inc., et al., Case No. 1:21-cv-00729
is an individual action filed in the United States District Court for the
District of Delaware; Waterman v. Grubhub Inc., et al., Case No. 2:21-cv-02414
is an individual action filed the United States District Court for the Eastern
District of Pennsylvania. The Shareholder Complaints named as defendants Grubhub
and members of its board of directors (the "Grubhub Board") and allege, among
other things, that the defendants violated Sections 14(a) and 20(a) of the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14a-9
promulgated thereunder by omitting supposedly material information from the
preliminary proxy statement (the "Proxy Statement") filed by Grubhub on
April 27, 2021 with the Securities and Exchange Commission ("SEC"), rendering
the filing false and/or misleading. The plaintiffs in the Ferreiro Complaint and
Langlois Complaint further allege breaches of fiduciary duties by the members of
the Grubhub Board as a result of an allegedly flawed and inadequate sales
process, alleged potential conflicts of interest, and alleged failure to include
information in the preliminary proxy statement. The plaintiffs in the Brown
Complaint and Lowinger Complaint further allege that certain provisions in
Merger Agreement are restrictive to Grubhub's ability to consider other offers.
The plaintiff in the Langlois Complaint alleges that Merger Consideration
represents inadequate compensation for Grubhub shares and the plaintiffs in the
Lowinger Complaint and Litwin Complaint allege that certain of Grubhub's
officers have significant financial interests in completing the Proposed
Transaction because of potential payouts and positions in the combined company.
The Shareholder Complaints seek various remedies, including, among other things,
injunctive relief to prevent the consummation of the Transaction unless certain
allegedly material information is disclosed, a directive that defendants
exercise their fiduciary duties to obtain an acquisition which is in the best
interest of Grubhub Stockholders, an award of attorneys' fees and expenses,
rescission of the Transaction or an award of damages should the Transaction be
consummated. A separate alleged shareholder, who did not also file a complaint,
sent a demand to the Grubhub Board requesting additional disclosures.
Grubhub and the other named defendants believe that the disclosures set forth in
the Proxy Statement comply fully with all applicable law, that no supplemental
disclosures are required under applicable law, and that the plaintiffs'
allegations in each of the Shareholder Complaints are without merit. However, in
an effort to put the claims that were or could have been asserted to rest, to
avoid nuisance and possible expense and transaction delays, and without
admitting any liability or wrongdoing, Grubhub is making certain disclosures set
forth below that supplement and revise those contained in the Proxy Statement.
Nothing in this Current Report on Form 8-K shall be deemed an admission of the
legal necessity or materiality under applicable law of any of the disclosures
set forth herein. To the contrary, Grubhub and the other named defendants have
denied, and continue to deny, that they have committed or assisted others in
committing any violations of law, further deny all allegations that any
disclosure was or is required or material, and expressly maintain that, to the
extent applicable, they have complied with their respective legal obligations.
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Supplemental Disclosures to Proxy Statement
This supplemental information should be read as part of, and in conjunction
with, the Proxy Statement, which should be read in its entirety and is on the
SEC's website at http://www.sec.gov, along with periodic reports and other
information Grubhub files with the SEC. To the extent that the information set
forth herein differs from or updates information contained in the Proxy
Statement, the information set forth herein shall supersede or supplement the
information in the Proxy Statement. To the extent defined terms are used but not
defined herein, they have the meanings set forth in the Proxy Statement.
The section of the Proxy Statement entitled "Grubhub Proposal I: Adoption of the
Merger Agreement-Background of the Merger" is amended and supplemented as
follows:
The third sentence of the first full paragraph on page 77 of the Proxy Statement
is hereby amended and supplemented as follows (with new text underlined and
deleted text struck through):
However, following these exploratory conversations did not progress beyond
preliminary discussions, and before commencing more comprehensive due diligence,
in May 2019 the parties mutually agreed to end the discussions.
The second sentence of the second full paragraph on page 77 of the Proxy
Statement is hereby amended and supplemented as follows (with new text
underlined and deleted text struck through):
On 8 July 2019, Grubhub and Company A entered into a mutual confidentiality
agreement, which contained a customary mutual standstill provision that
permitted either party to make private proposals to the other party and
containedwith a customary "fall away" provision providing that a party's
standstill obligations would terminate in certain circumstances, including upon
the other party entering into a binding agreement related to a change of control
of such company.
The third sentence of the last paragraph on page 77 of the Proxy Statement is
hereby amended and supplemented as follows (with new text underlined and deleted
text struck through):
"At the meeting, the Grubhub Board decided to form an ad hoc advisory committee
(the "M&A Committee") consisting of Messrs. David Fisher, Lloyd Frink and Brian
McAndrews, independent members of the Grubhub Board selected on the basis of
their experience with similar transactions, to assist the Grubhub Board in its
evaluation of a potential strategic transaction. The Grubhub Board approved the
formation of the M&A Committee on the basis that the entire Board would
participate in decision-making, with the M&A Committee facilitating expedited
interim discussions."
The fourth full paragraph on page 79 of the Proxy Statement is hereby amended
and supplemented as follows (with new text underlined and deleted text struck
through):
Also on 29 April 2020, Grubhub and Just Eat Takeaway.com entered into a mutual
confidentiality agreement, which contained a customary standstill provision that
permitted Just Eat Takeaway.com to make private proposals to the Grubhub Board
or Grubhub's chief executive officer and contained and a related "fall away"
provision providing that the standstill obligations would terminate in certain
circumstances, including Grubhub entering into a binding agreement related to a
change of control of Grubhub.
The third paragraph on page 80 of the Proxy Statement is hereby amended and
supplemented by adding the following sentence at the end of such paragraph:
"During the meeting, the Grubhub Board also considered the media reports
published the same day that Grubhub had received a takeover proposal from a
publicly traded competitor in the online food delivery industry, and the impact
thereof on ongoing discussions with Company A, as well as the fact that such
reports could prompt other interested parties to submit competitive offers in
the near term."
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The paragraph at the bottom of page 80 and at the top of page 81 of the Proxy
Statement is hereby amended and supplemented by adding the following sentence at
the end of such paragraph:
"Just Eat Takeaway.com did not mention the retention plans or equity
participation in the combined company to be offered by Just Eat Takeaway.com to
Grubhub management in any of its proposals communicated on 18 May, 24 May or 4
June."
The first full paragraph on page 81 of the Proxy Statement is hereby amended and
supplemented as follows (with new text underlined and deleted text struck
through:
Following discussion regarding the intrinsic value of the respective parties'
stock and conditionality involved in a transaction with either party, the
Grubhub Board directed Grubhub management and representatives of Evercore to
seek an indication of interest from Company B and to improve and clarify the
terms of Just Eat Takeaway.com's 18 May proposal, in particular with respect to
the governance of a combined company, the number (but not identity) of Grubhub's
representatives it would be entitled to designate to the Just Eat Takeaway.com
Management and Supervisory Boards, and listing of the stock to be issued as
merger consideration.
The fourth full paragraph on page 81 of the Proxy Statement is hereby amended
and supplemented as follows (with new text underlined and deleted text struck
through):
On the same day, Grubhub and Company B entered into a mutual confidentiality
agreement, which contained a customary standstill provision that permitted
Company B to make private proposals to the Grubhub Board or Grubhub's chief
executive officer and contained and a related "fall away" provision providing
that the standstill obligations would terminate in certain circumstances,
including upon Grubhub entering into a binding agreement related to a change of
control. On the following day, Grubhub provided Company B initial preliminary
due diligence materials.
The seventh paragraph on page 83 of the Proxy Statement is hereby amended and
supplemented by adding the following sentence at the end of such paragraph:
"Mr. Maloney did not discuss with Mr. Groen or any other representatives of Just
Eat Takeaway.com, on that day or during the course of any other discussions or
negotiations with representatives of Just Eat Takeaway.com, the specifics of any
potential compensation opportunities that may be offered to him in connection
with such potential role at the combined company, other than the fact that the
remuneration of any members of the Just Eat Takeaway.com Management Board would
be subject to Dutch legal requirements, market practices and Just Eat
Takeaway.com's existing remuneration policies, and that as a result, if
Mr. Maloney were to join the Just Eat Takeaway.com Management Board, approval by
Just Eat Takeaway.com Shareholders of a remuneration policy supplement would be
necessary in order for Just Eat Takeaway.com to provide Mr. Maloney with a
remuneration package consistent with his remuneration as chief executive officer
of Grubhub."
The section of the Proxy Statement entitled "Grubhub Proposal I: Adoption of the
Merger Agreement-Opinion of Grubhub's Financial Advisor -Summary of Evercore's
Financial Analyses" starting on page 97 of the Proxy Statement is amended and
supplemented as follows:
The disclosure under the subheading "-Discounted Cash Flow Analysis" starting on
pages 97 and 98 of the Proxy Statement is amended and supplemented as follows
(with new text underlined and deleted text struck through):
"Grubhub
Evercore performed a discounted cash flow analysis of Grubhub to calculate the
estimated present value of the standalone unlevered, after-tax free cash flows
that Grubhub was forecasted to generate during Grubhub's second, third and
fourth quarter of fiscal year 2020 and fiscal years 2021 through 2024 based on
the Grubhub financial projections (the "Grubhub Projections DCF"). Evercore
calculated terminal values for Grubhub by applying terminal year multiples
ranging from 16.0x to 20.0x, which range was selected by Evercore based on its
professional judgment and experience, to the estimated terminal year adjusted
EBITDA of Grubhub as reflected in the Grubhub financial projections (which
analysis implied perpetuity growth rates for Grubhub for the period after
31 December 2024 ranging from 6.8% to 9.2%). The cash flows and terminal values
in each case were then discounted to present value as of 31 March 2020 using
discount rates ranging from 9.0% to 11.0%, which were based on an estimate of
Grubhub's weighted average cost of capital, as estimated by Evercore based on
the Capital Asset Pricing Model ("CAPM"), and the mid-year cash flow discounting
convention. Evercore derived a range of illustrative enterprise values for
Grubhub by adding the ranges of present values for the cash flows and terminal
values and the estimated present value as of 31 March 2020 of the tax savings of
Grubhub attributed to its net operating losses calculated by applying the same
range of discount rates referred to above. Evercore then subtracted from the
range of illustrative enterprise values it calculated Grubhub's net debt
(defined as total debt, including lease liabilities, less cash and cash
equivalents) of approximately $203 million as of 31 March 2020, as calculated
based on Grubhub's public filings and information provided to Evercore by
Grubhub management and approved for Evercore's use by Grubhub management to
derive a range of illustrative equity values for Grubhub. Evercore then divided
the range of illustrative equity values it derived for Grubhub by the number of
fully diluted outstanding Grubhub Shares, calculated using the treasury stock
method, as provided to Evercore by Grubhub management and approved for
Evercore's use by Grubhub management. This analysis indicated a range of implied
share prices per Grubhub Share of approximately $40.63 to approximately $55.58.
--------------------------------------------------------------------------------
For reference purposes only and using the same method as described above for the
Grubhub Projections DCF, Evercore also performed a discounted cash flow analysis
of Grubhub based on the Grubhub financial projections and taking into account
50% of the estimated cost synergies (the "Grubhub Projections Plus Synergies
DCF"). Evercore calculated a range of implied values of synergies by applying
multiples ranging from 10.0x to 12.0x to the estimated cost synergies, which
range was selected by Evercore based on its professional judgment and
experience, and dividing the resulting range by 50%. Evercore then calculated
the implied value of the synergies per Grubhub Share by dividing the range of
implied synergies by the number of fully diluted outstanding Grubhub Shares,
calculated using the treasury stock method, as provided to Evercore by Grubhub
management and approved for Evercore's use by Grubhub management. Evercore then
added to the implied share prices of Grubhub Shares (as calculated above) the
implied value of the synergies per Grubhub Share. This analysis indicated a
range of implied share prices per Grubhub Share of approximately $43.20 to
approximately $58.67.
Just Eat Takeaway.com
Evercore performed a discounted cash flow analysis of Just Eat Takeaway.com to
calculate the estimated present value of the standalone unlevered, after-tax
free cash flows that Just Eat Takeaway.com was forecasted to generate during
Just Eat Takeaway.com's fiscal years 2020 through 2029 based on the counterparty
financial projections. Evercore calculated terminal values for Just Eat
Takeaway.com by applying terminal year multiples ranging from 12.0x to 14.0x,
which range was selected by Evercore based on its professional judgment and
experience, to the estimated terminal year adjusted EBITDA of Just Eat
Takeaway.com as reflected in the counterparty financial projections (which
analysis implied perpetuity growth rates for Just Eat Takeaway.com for the
period after 31 December 2029 ranging from of 2.6% to 5.3%). The cash flows and
terminal values in each case were then discounted to present value as of
31 March 2020 using discount rates ranging from 9.0% to 11.0%, which were based
on an estimate of Just Eat Takeaway.com's weighted average cost of capital, as
estimated by Evercore based on CAPM, and the mid-year cash flow discounting
convention. Evercore derived a range of illustrative enterprise values for Just
Eat Takeaway.com by adding the ranges of present values for the cash flows and
terminal values and the estimated present value as of 31 March 2020 of the tax
savings of Just Eat Takeaway.com attributed to unused tax losses, calculated by
applying the same range of discount rates referred to above. Evercore then
subtracted from the range of illustrative enterprise values it calculated Just
Eat Takeaway.com's estimated net debt (defined as total debt, including lease
liabilities, less cash and cash equivalents) of approximately €20 million, as
calculated based on information provided to Evercore by Just Eat Takeaway.com
management and approved for Evercore's use by Grubhub management and added Just
Eat Takeaway.com's unconsolidated assets of approximately €1.32 billion, which
includes a 0.24% stake in Woowa Brothers, as calculated based on Delivery Hero's
proposed €3.6 billion acquisition per public filings and press releases, and a
33% stake in iFood, as calculated based on median of research analyst estimates,
as calculated based on Takeaway.com N.V.'s public filings, certain publicly
available research analyst reports for Just Eat Takeaway.com
--------------------------------------------------------------------------------
and information provided to Evercore by Grubhub management and approved for
Evercore's use by Grubhub management to derive a range of illustrative equity
values for Just Eat Takeaway.com. Evercore then divided the range of
illustrative equity values it derived for Just Eat Takeaway.com by the number of
fully diluted outstanding Just Eat Takeaway.com Shares, calculated using the
treasury stock method, as provided to Evercore by Just Eat Takeaway.com
management and approved for Evercore's use by Grubhub management. This analysis
indicated a range of implied share prices per Just Eat Takeaway.com Share of
approximately €106.34 to approximately €136.68."
The first sentence of the final paragraph on page 98 of the Proxy Statement is
hereby amended and supplemented as follows (with new text underlined):
"For reference purposes only, Evercore reviewed selected public market trading
price targets for the Grubhub Shares prepared and published by twenty-one equity
research analysts that were publicly available as of 9 June 2020."
The first sentence of the first paragraph on page 99 of the Proxy Statement is
hereby amended and supplemented as follows (with new text underlined):
"For reference purposes only, Evercore reviewed selected public market trading
price targets for the Just Eat Takeaway.com Shares prepared and published by
thirteen equity research analysts that were publicly available as of 9 June
2020."
The section of the Proxy Statement entitled "Grubhub Proposal I: Adoption of the
Merger Agreement- Certain Unaudited Prospective Financial Information Prepared
by Grubhub" starting on page 101 of the Proxy Statement is amended and
supplemented as follows:
The table on page 103 of the Proxy Statement presenting a summary of the Grubhub
financial projections and related footnotes are hereby replaced with the
following:
(USD, in millions) 2020E 2021E 2022E 2023E 2024E
Revenue $ 1,590 $ 1,982 $ 2,410 $ 2,810 $ 3,242
Net income (loss)(1) $ (156 ) $ (113 ) $ (67 ) $ 15 $ 113
Adjusted EBITDA(2) $ 101 $ 174 $ 239 $ 308 $ 412
Levered free cash flow(3) $ (5 ) $ 65 $ 127 $ 190 $ 291
(1) For purposes of the Grubhub financial projections, net income (loss) is
calculated as income (loss) from operations, less net interest expense, less
income tax expense.
(2) For purposes of the Grubhub financial projections, adjusted EBITDA is
calculated as net income (loss) before acquisition, restructuring and certain
legal costs, income taxes, net interest expense, depreciation and
amortization and stock-based compensation expense.
(3) For purposes of the Grubhub financial projections, levered free cash flow is
calculated as net income (loss) plus depreciation, amortization, stock-based
compensation expenses, change in working capital and cash flow from other
operating activities and less capital expenditures.
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Forward-Looking Statements
This communication contains "forward-looking statements" regarding Grubhub, Just
Eat Takeaway.com or their respective management's future expectations, beliefs,
intentions, goals, strategies, plans and prospects, which, in the case of
Grubhub, are made in reliance on the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve substantial risks, known and unknown, uncertainties, assumptions and
other factors that may cause actual results, performance or achievements to
differ materially from future results expressed or implied by such
forward-looking statements including, but not limited to, the occurrence of any
event, change or other circumstances that could give rise to the right of one or
both of Grubhub or Just Eat Takeaway.com to terminate the merger agreement; the
ability to obtain approval by Grubhub stockholders on the expected schedule or
at all; difficulties and delays in integrating Grubhub's and Just Eat
Takeaway.com's businesses; risks that the proposed merger disrupts Grubhub's or
Just Eat Takeaway.com's current plans and operations; failing to fully realize
anticipated synergies, cost savings and other anticipated benefits of the
proposed merger when expected or at all; potential adverse reactions or changes
to business relationships resulting from the announcement or completion of the
proposed merger; the risk that unexpected costs will be incurred; the ability of
Grubhub or Just Eat Takeaway.com to retain and hire key personnel; the diversion
of management's attention from ongoing business operations; uncertainty as to
the value of the Just Eat Takeaway.com ordinary shares to be issued in
connection with the proposed merger; uncertainty as to the long-term value of
the common stock of the combined company following the proposed merger; the
continued availability of capital and financing following the proposed merger;
the outcome of any legal proceedings that may be instituted against Grubhub,
Just Eat Takeaway.com or their respective directors and officers; changes in
global, political, economic, business, competitive, market and regulatory
forces; changes in tax laws, regulations, rates and policies; future business
acquisitions or disposals; competitive developments; and the timing and
occurrence (or non-occurrence) of other events or circumstances that may be
beyond Grubhub's and Just Eat Takeaway.com's control. These and other risks,
uncertainties, assumptions and other factors may be amplified or made more
uncertain by the COVID-19 pandemic, which has caused significant economic
uncertainty. The extent to which the COVID-19 pandemic impacts Grubhub's and
Just Eat Takeaway.com's businesses, operations and financial results, including
the duration and magnitude of such effects, will depend on numerous factors,
which are unpredictable, including, but not limited to, the duration and spread
of the outbreak, its severity, the actions taken to contain the virus or treat
its impact, and how quickly and to what extent normal economic and operating
conditions can resume. Forward-looking statements generally relate to future
events or Grubhub and Just Eat Takeaway.com's future financial or operating
performance and include, without limitation, statements relating to the proposed
merger and the potential impact of the COVID-19 outbreak on Grubhub and Just Eat
Takeaway.com's business and operations. In some cases, you can identify
forward-looking statements because they contain words such as "anticipates,"
"believes," "contemplates," "could," "seeks," "estimates," "intends," "may,"
"plans," "potential," "predicts," "projects," "should," "will," "would" or
similar expressions and the negatives of those terms.
While forward-looking statements are Grubhub's and Just Eat Takeaway.com's
current predictions at the time they are made, you should not rely upon them.
Forward-looking statements represent Grubhub's and Just Eat Takeaway.com's
management's beliefs and assumptions only as of the date of this communication,
unless otherwise indicated, and there is no implication that the information
contained in this communication is made subsequent to such date. For additional
information concerning factors that could cause actual results and outcomes to
differ materially from those expressed or implied in the forward-looking
statements, please refer to the cautionary statements and risk factors included
in Grubhub's filings with the Securities and Exchange Commission (the "SEC"),
including Grubhub's Annual Report on Form 10-K filed with the SEC on March 1,
2021, Grubhub's Quarterly Reports on Form 10-Q and any further disclosures
Grubhub makes in Current Reports on Form 8-K. Grubhub's SEC filings are
available electronically on Grubhub's investor website at investors.grubhub.com
or the SEC's website at www.sec.gov. For additional information concerning
factors that could cause future results to differ from those expressed or
implied in the forward-looking statements, please refer to Just Eat
Takeaway.com's non-exhaustive list of key risks and cautionary statements
included in Just Eat Takeaway.com's Annual Report, which is available
electronically on Just Eat Takeaway.com's investor website at
www.justeattakeaway.com. Except as required by law, Grubhub and Just Eat
Takeaway.com assume no obligation to update these forward-looking statements or
this communication, or to update, supplement or correct the information set
forth in this communication or the reasons actual results could differ
materially from those anticipated in the forward-looking statements, even if new
information becomes available in the future. All subsequent written and oral
forward-looking statements attributable to Grubhub, Just Eat Takeaway.com or any
person acting on behalf of either party are expressly qualified in their
entirety by the cautionary statements referenced above.
Additional Information and Where to Find It
In connection with the proposed merger, Just Eat Takeaway.com has filed with the
SEC a registration statement on Form F-4 to register the shares to be issued in
connection with the proposed merger. The registration statement was declared
effective by the SEC on May 12, 2021, and includes a proxy statement of
Grubhub/prospectus of Just Eat Takeaway.com. The definitive proxy
statement/prospectus was first mailed to the stockholders of Grubhub on or about
May 12, 2021, seeking their approval of the respective merger-related proposals.
Also in connection with the proposed
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merger, on or about May 12, 2021, Just Eat Takeaway.com filed with the
Netherlands Authority for the Financial Markets ("AFM") and the UK Financial
Conduct Authority ("FCA") a prospectus for the listing and admission to trading
on Euronext Amsterdam and the admission to listing on the FCA's Official List
and to trading on the London Stock Exchange's Main Market for listed securities
. . .
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