EMEA Structured Equity Issue: Takeaway.com’s €680m ABB and convertible bond

IFR Awards 2019
3 min read
Robert Venes

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Dutch food delivery service Takeaway.com in January wanted to refinance €680m of freshly-inked 12-month bridge loans related to the €930m cash and stock acquisition of Delivery Hero’s German business.

The feedback from existing shareholders and potential investors was clear that the equity fundraising should be completed in one step. The key was finding a trade representing about 30% of market capitalisation that could be completed rapidly and was easy to digest.

“In this market, if there is a window, you take it,” a banker said at the time.

The solution was a primary accelerated bookbuild of €430m, upsized by 30% during bookbuilding, and a €250m five-year convertible bond. The equity leg was a 19% capital increase and represented more than 100 days’ trading, with the CB adding another 8.3%.

To maximise attention, annual results were brought forward to January 17 from the scheduled February 23, with the combined accelerated equity issue and convertible bond launched that evening.

Takeaway.com employed different syndicates for the two legs of the deal with just Bank of America at the top level of both. There were no signs this hindered execution, with one banker involved noting “they had banks who knew what they were doing” on each leg.

ABN AMRO, Bank of America and ING led the ABB, while BofA, Societe Generale and UBS oversaw the CB.

The scale of the fundraising and lack of credit profile for Takeway.com could have been problematic. The company was yet to be profitable, had no outstanding bonds, no rating and few listed peers holding debt to compare against.

“The company has negative Ebitda, so if you did the credit analysis you wouldn’t buy the CB,” said Thomas Feuerstein, co-head of ECM for France, Belgium and Luxembourg at Societe Generale who ran equity-linked at the time of the deal. “We sold the equity story.”

That story pointed to future positive Ebitda, achieved in the first half, and expectations of M&A in what remains an underdeveloped sector.

The bonds also offered sector diversification for CB investors who ended up settling on mid-range pricing of a 2.25% coupon and 35% premium to the equity price. The equity leg had priced at an 8.7% discount and shares had recovered to pre-placing levels in a few days.

When Takeaway.com said in July it was discussing an all-share merger with UK peer Just Eat, its shares shot above the conversion price. Having been one of the best performing stocks in Europe since its IPO Takeaway.com delivered one of the best performing convertibles.

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