Spirit board gives Greene King revised offer its conditional backing: Spirit has told the market that it has given a revised Greene King offer a conditional green light. The revised proposal comprises 0.1322 Greene King shares per Spirit share and a cash payment of 8p (including any 2014 final dividend) representing an indicative value of approximately 109.5p per Spirit share based on the closing price of Greene King shares on 17 October 2014. Under the revised proposal, Spirit shareholders would own approximately 29% of combined new Greene King. The revised proposal remains conditional on, amongst other things, confirmatory due diligence and the recommendation of the board of Spirit. Spirit stated: “The board of Spirit has indicated to Greene King that it would be willing to recommend an offer at the level of the revised proposal to Spirit shareholders subject to the satisfactory resolution of the other terms of the offer. Accordingly, the board is in discussions with Greene King in relation to these terms. With the consent of the Takeover Panel, Spirit has agreed to an extension of the relevant deadline under Rule 2.6(c) of the Takeover Code until 5.00pm on 30 October 2014 to enable the parties to conclude their ongoing discussions. This deadline may be extended further with the consent of the Takeover Panel, at Spirit’s request, in accordance with Rule 2.6(c) of the Takeover Code. There can be no certainty that any firm offer will be made. This statement is being made by Spirit with the consent of Greene King.”

Analyst - Just Eat investors need to enjoy the dish now before it gets cold: Analyst Nick Batram, of Peel Hunt, has questioned the long-term viabilty on the online takeaway business model. In a note this morning, he stated: “Just Eat has enjoyed explosive growth and we expect the positive momentum to continue in the short term, with organic expansion supplemented by strategic acquisitions. However, (there are) a number of issues that in the long term suggest the pricing structure is unsustainable and the business model vulnerable. Just Eat still offers the potential to be a highly profitable business, but investors need to enjoy the dish now before it gets cold. The emergence of online aggregator networks in the takeaway delivery market highlights a genuine online opportunity. We estimate that c25% of takeaway food is currently ordered online, but by the end of the decade we expect this to grow to more than 50%. Just Eat has strong momentum, and in the race to grab land has the balance sheet to supplement dynamic organic growth with strategic acquisitions in its core markets. In the short term, we expect the rapid rate of expansion to continue (But) we have real concerns about the sustainability of the current pricing structure. This view is based on a number of factors, including high charges relative to limited IP, questionable bottom-line value accretion for restaurants, and ultimately we see the aggregator model as a zero-sum game for the takeaway food industry. In addition, the takeaway aggregator business model as it currently stands compares unfavourably with other online platforms/distribution models, both from a B2B and B2C perspective. Therefore, this leaves Just Eat vulnerable to disruptive new business models. There is a fierce land grab in the online takeaway aggregator market, with the four leading players all raising money in the last year. Comments from some of these players already point to more intense competition, while there is also a risk of over-paying for acquisitions. In the short term our forecasts are broadly around consensus; however, from 2017 and beyond we are more cautious. Our base case DCF gives a fair value of 247p (165p for the established operations and 82p for emerging markets). Our bull case (407p) does give greater upside than our bear case (144p) downside, but given the long-term concerns it is insufficient for us to be more positive at this stage.”