Just Eat Takeaway’s largest shareholders have warned the food delivery group to prop up the its share price otherwise to avoid the risk of a hostile takeover.
Cat Rock Capital, which previously owned stakes in Just Eat and Takeaway.com before the two companies’ $6 billion merger last year, is asking the company to consider “strategic options” including divestments or a merger with a larger rival.
The investment group has blamed the company’s 27 per cent drop in share price on “broken communication” with investors.
Cat Rock’s founder and managing partner Alex Captain has said that Just Eat Takeaway should explore the possibility of an all-share merger with “other global players” which could include Delivery Hero, DoorDash or Amazon, given the company’s value as Europe’s largest food delivery player.
“We think the company could be vulnerable to a lowball bid in the near term if it does not take action,” Captain said.
Cat Rock has recently increased its stake in the food delivery group to almost five per cent, putting it in the group’s largest five investors.
“While we have been pleased with JET’s (Just Eat Takeaway) strong operational performance under CEO Jitse Groen and his team, we have been deeply disappointed by the company’s poor handling of its relationship with investors.
“JET’s deeply flawed communication has made it the worst-performing online food delivery stock over the past two years despite strong operational performance.”
Captain believes that the JET needs to explain why it is investing so heavily in its own logistics infrastructure and new areas such as grocery delivery.
He urged the company’s chief executive Jitse Groen to consider divesting its assets outside its core business operations which include its recent acquisition of Grubhub.