Cat Rock urges investor revolt against Just Eat Takeaway board

Just Eat Takeaway's largest independent shareholder urged investors to oust its chief financial officer and called for the supervisory board to be dismissed amid after claiming the company misled shareholders over its $7bn takeover of Grubhub.

US activist investor Cat Rock Capital, which holds a 6.9% stake in the online food delivery platform, said Just Eat had “torpedoed the company’s share price by providing a misleading outlook”.

Alex Captain, Cat Rock’s founder and managing partner, said in an open letter to investors that the Grubhub deal was a “capital allocation mistake” that had led to a 75% stock market decline despite the food delivery boom doubling sales.

He is voting against a series of shareholder resolutions at the annual meeting in Amsterdam on May 4. They include voting against the supervisory board, the re-election of the chief financial officer, Brent Wissink, and the authority of the board to issue new shares.

Cat Rock also plans to abstain in a vote on founder Jitse Groen, JET’s chief executive and its largest shareholder, with 7.1% of shares.

“We believe the bulk of the value destruction occurred because JET management gave investors a misleading financial outlook in advance of the two Grubhub shareholder votes, leading to two massive profit downgrades in 2021 and shattering investor trust in management,” he said.

“JET needs a new chief financial officer to restore credibility with the capital markets and a new supervisory board to quickly refocus the business on Europe, use the proceeds of divestitures to strengthen JET’s capitalisation, and actively evaluate other strategic options.”

Cat Rock’s call comes as another Just Eat investor, Lucerne Capital Management, said earlier this month it planned to vote against the reappointment of Wissink and the board.

The fortunes of food delivery firms soared during the coronavirus pandemic lockdowns as people faced restrictions on movements and were working from home.

Amsterdam-listed Just Eat Takeaway (JET) was formed in 2020 through the merger of Takeaway.com and its British rival Just Eat. It then bought Grubhub to give the company access to the huge US market.

However, the company last week said it was looking for a “strategic partner” or a sale of Grubhub.

JET’s market value rose as high as €17.4bn (£14.7bn) in early 2021, before a series of profit downgrades led to a sell-off that prompted its value to fall to €5.5bn on Monday.

Cat Rock said that the company had “destroyed” €16bn in equity value because of a “complete loss of trust in the management and supervisory boards’ capital allocation and financial management”.

Just Eat Takeaway said the removal of the board would be “both value destructive and destabilising”.

“JET’s management shares investor disappointment in the recent share price performance of the company,” it said. “However, the actions we are taking, including in relation to Grubhub, are intended to create significant shareholder value.

“We have always acted in good faith and in line with our obligations with regard to our market communications, including in respect of the Grubhub acquisition.”