Activist investor Cat Rock Capital has written to Just Eat Takeaway’s shareholders and outlined its concerns in a failure of leadership.
Shareholders have been urged to vote against the chief financial officer and legacy supervisory board at the delivery firm’s next AGM.
Potential in the company was going to waste due to “poor capital allocation, failed financial management, and lack of credibility with capital markets,” a letter stated.
Cat Rock owns around 6.9 per cent of the company’s outstanding shares.
Shareholders have been “punished” by a 75 per cent stock price fall in less than two years, Alex Captain, Cat Rock founder and managing partner, said.
This came despite the company growing 97 per cent organically and “maintaining clear market leadership across many of the world’s largest economies.”
Captain added: “We believe JET’s equity value has decoupled from its fundamentals because of a complete loss of trust in the management and supervisory boards’ capital allocation and financial management.”
A $6bn deal to buy a US arm GrubHub in June 2020 “cannot explain the -€16 billion of equity value that has been destroyed in less than two years,” the partner added.
Cat Rock has previously urged a sale of Grubhub and described the deal as a “capital allocation mistake” on Monday. The delivery company said it was mulling a sale of the firm earlier this month.
Instead, Captain said the investor believes the “bulk of value destruction” happened as JET management provided investors with “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.
JET said the proposal to remove certain members would be “both value destructive and destabilizing.”
A JET spokesperson said the company’s management “shares investor disappointment in the recent share price performance of the company.”
The spokesperson added: “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.”