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Activist investor warns of risk of antagonistic takeover of Just Eat Takeaway

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Just eat takeaway updates

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One of the largest shareholders in Just Eat has called on the food delivery group to take crucial action to shore up its share price, to avoid a antagonistic takeover.

Cat Rock Capital, which owned stakes in both Just Eat and prior the British and Dutch companies joined the £6 billion merger final year, has blamed the 27 per cent drop in the group’s share price so far this year on ” Broken communication with investors.

The activist investor, who first pushed for the Just Eat merger in 2019, is now calling on the Amsterdam-based food delivery group to explore “strategic options” including divesting or merging with a larger competitor.

Alex Captain, founder and managing partner of Cat Rock, said JET should explore an all-share merger with “other global players,” such as DoorDash, Delivery Hero, China’s Meituan or Amazon, given its “lofty strategic value” as Europe’s largest food delivery operator.

“We believe that the company may be vulnerable to a low-level bid in the near term if it does not take any action,” he said.

Cat Rock of Greenwich, Connecticut, first invested in in 2017 and recently increased its stake in JET to nearly 5 percent, making it among the company’s top five investors.

“While we were pleased with JET’s powerful operational performance under the leadership of CEO Jitse Groen and his team, we were deeply disappointed by the company’s destitute handling of its relationship with investors,” said the captain.

“JET’s deeply flawed communications have made it the worst performing online food delivery stock over the former two years despite powerful operating performance.”

The captain said in an interview that JET should explain why it is investing heavily in its logistics infrastructure and unused growth areas such as grocery delivery.

He urged Gruen to consider selling assets outside of its core European business, which includes its Brazilian joint venture iFood and Grubhub, the US food delivery company that JET acquired in a $7.3 billion deal that closed just final month.

Cat Rock’s decision to go public with its complaints follows a private letter to JET management final month from another activist shareholder, Oceanwood Capital Management, which expressed similar concerns about an unwanted takeover interest.

The filings show that Tiger Global, one of the most active tech investors this year, has also bought more than 5 percent worth of JET shares in recent months. Tiger has also supported food delivery companies including Zomato, Wolt and Getir.

Just Eat Takeaway’s stock price has fallen to levels final seen in beforetime March 2020, when the pandemic triggered a massive sell-off in the stock market, eliminating any benefit from the explosive growth food delivery companies have experienced during the pandemic.

Two weeks ago, its stock was down 9 percent in one day, although a 51 percent jump in orders was reported for the first half of 2021 as investors digested unused guidance that included a €280 EBITDA loss. – 450 million euros this year, much more than the tens of millions of euros previously indicated by the company.

The captain sees this as a failure to manage investor expectations and to explain the lengthy-term benefits of his investments.

Just Eat declined to comment.


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