Prosus-owned OLX Group has announced its intentions to become Frontier Car Group‘s biggest shareholder. The deal, which is still pending a tender offer process, will see OLX invest up to $400 million via a capital injection, the contribution of OLX’s joint-venture shares in India and Poland, and the acquisition of shares held by other investors, managers, and founders.
OLX Group began its relationship with the Frontier Car Group (FCG) in May 2018 when the company invested $89 million in the emerging markets-focused car buying service. The investment allowed FCG to expand to more locations and buy WeBuyAnyCar in the U.S. Together, the companies launched Cash My Car as physical stores in India in November last year. They’ve also applied to the local competition authority to launch a car buying service in Poland.
“FCG’s instant cash services, combined with OLX’s proprietary classifieds technology and reach, have transformed the online car marketplace,” OLX said in a news statement. The businesses have already joined forces to offer a dealer management system and pricing products. “Fully integrating the two companies will allow for faster expansion while improving and increasing the services available to buyers and sellers.”
OLX CEO Martin Scheepbouwer said the company is in a unique position to accelerate FCG’s expansion. “Our experience in India is a great proof of concept, where within the space of a year, our joint venture has already increased the number of stores threefold, with car purchase volumes continuing to grow by 10% month-on-month.”
Just Eat bid
In other Prosus news, the company published its bid for European food delivery company Just Eat on Monday.
Prosus announced its bid in October offering 710 pence in cash for each Just Eat share or £4.9 billion ($6.3 billion U.S.) — 20% more than rival Takeaway.com is offering. Just Eat was, however, already in negotiations with Takeaway.com at the time.
In it’s published offer, Prosus notes that Takeaway.com’s share price has fallen 12.4% since the start of the offer period. The company suggested it was providing a premium offer. “Prosus believes that Just Eat requires substantial investment in product, technology, marketing, and own-delivery capabilities to shift to an own-delivery focused hybrid model (i.e. own-delivery and marketplace), protect its market position and capitalize on its long-term opportunity.”
Just Eat asked its shareholders to reject the Prosus offer on Monday. “The Board believes that Just Eat is a leading strategic asset in the food delivery sector and the Prosus Offer fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects,” the company said. “The Board of Just Eat believes that the Takeaway.com Combination is based on a compelling strategic rationale that will deliver a number of strategic benefits and greater value creation to Just Eat shareholders than the terms of the Prosus Offer.”
According to TechCrunch, Just Eat and Takeaway.com have already consolidated operations together and should the latter become a buyer, the companies will be merged.
Prosus has said it won’t be interested in a buyout if the merger goes ahead.