Youfoodz (ASX:YFZ) share price rockets 80% after HelloFresh takeover offer

M&A activity continues to heat up…

| More on:
Vanadium Resources share price person riding rocket indicating share price increase

Image source: Getty Images

The Youfoodz Holdings Ltd (ASX: YFZ) share price is rocketing higher in morning trade.

At the time of writing, the ready-made meals company’s shares are up a whopping 80% to 92 cents.

Why is the Youfoodz share price rocketing higher?

Investors have been bidding the Youfoodz share price higher this morning after it revealed that it has entered into a scheme implementation deed with meal kit delivery company HelloFresh.

According to the release, this scheme will see HelloFresh acquire 100% of the share capital in Youfoodz for 93 cents per share in cash by way of a scheme of arrangement. This represents a premium of 82% to the Youfoodz share price at yesterday’s close. It is also a 109% premium to the one-month volume weighted average price (VWAP) of 44 cents.

Based on the offer price, this values Youfoods at $125 million, which is down materially from its December IPO valuation of $201.9 million.

The Youfoodz Board unanimously recommends that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert’s report. RGT Capital, a holder of 57.4% of Youfoodz shares, intends to vote in favour of the scheme under those same conditions.

Is this a good deal?

While the Nuix Ltd (ASX: NXL) IPO is likely to take the biscuit for the worst IPO of the last 12 months, the Youfoodz IPO could be a close second.

Today’s takeover approach may come at a significant premium to its last close price but is a massive 38% discount to its IPO listing price from just seven months ago.

This means that anyone that invested $10,000 in the Youfoodz IPO in December will see the value of their investment realised at $6,200 if the takeover completes successfully.

The scheme remains subject to customary conditions. These include Youfoodz shareholder approval, Federal Court of Australia approval, and no material adverse change or prescribed occurrences.

Should you invest $1,000 in Youfoodz right now?

Before you consider Youfoodz, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Youfoodz wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Mergers & Acquisitions

Three women laughing and enjoying their gambling winnings while sitting at a poker machine
Mergers & Acquisitions

Here’s why the Crown share price is climbing higher today

The takeover of Crown Resorts is one step closer.

Read more »

a woman drawing image on wall of big fish about to eat a small fish
Mergers & Acquisitions

Here’s why the MyDeal share price is rocketing 56% today

A generous takeover offer has taken the ASX by storm this morning.

Read more »

Cheerful businesspeople shaking hands in the office celebrating the Dusk acquisition of Eroma
Mergers & Acquisitions

APA share price rises amid takeover rumours

APA shares are in focus as reports suggest the company could be the target of a takeover.

Read more »

a man surrounded by huge piles of paper looks through a magnifying glass at his computer screen.
Mergers & Acquisitions

Woolworths share price in focus on MyDeal acquisition proposal

Woolworths has its sights on this ASX-listed online marketplace.

Read more »

Two men in a bar looking uncertain as they hold a betting slip and watch TV.
Mergers & Acquisitions

Here’s why the Tabcorp share price is lifting on Wednesday

The gambling entertainment company has started the day in the green.

Read more »

businessman takes off with rockets under feet
Mergers & Acquisitions

Boom! Here’s why the Havilah Resources share price just exploded 165%

A potential $205 million acquisition has got the market excited over this metals explorer.

Read more »

a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the IAG share price continue to fall
Mergers & Acquisitions

Brambles share price sinks 7% after takeover talks collapse

Brambles shares are in reverse on Tuesday after takeover talks collapsed...

Read more »

A woman pulls devil rock'n'roll hands and sticks her tongue out whilst headbanging, she's rocking it.
Mergers & Acquisitions

Here’s why the Brambles share price is rocketing 11% on Monday

The company confirmed it's in takeover talks this morning.

Read more »