A major investor in Just Eat Takeaway has urged the food delivery platform to explore a potential merger as it took aim at the company’s share price performance.
Cat Rock Capital, which holds a 4.7 per cent stake in the group, slammed management’s “deeply flawed communication” with investors, which it blamed for a 28 per cent share price drop this year.
The activist investor said the Amsterdam-based company was now at risk of a hostile takeover bid well below market value and called for bosses to explore “strategic combinations with other global players”.
Alex Captain, founder and managing partner of Cat Rock Capital, said: “JET can quickly and materially improve its standing in the capital markets by improving transparency, selling non-core assets, and exploring strategic options to strengthen the business and generate significant shareholder value.”
The investor, which owned stakes in both Just Eat and Takeaway.com before their £6bn merger last year, said that while it was pleased with the company’s operational performance under boss Jitse Groen, it was “deeply disappointed” by its handling of investor relations.
It accused the firm of failing to be transparent about the cost of investments and its impact on profit, which it said had undermined its credibility in the market.
Cat Rock also blasted the “immense confusion and misunderstanding” caused when Just Eat publicly criticised the potential of businesses it was actively invested in, such as logistics and grocery delivery.
In a final salvo it said management had failed to defend the company from competitor attacks, such as a critical tweet from Uber boss Dara Khosrowshahi.
It pointed to US rival DoorDash, which is forecast to generate similar amounts of gross merchandise value this year but has a valuation more than four times higher.
In addition to a potential merger, Cat Rock called on Just Eat to improve transparency and sell off non-core assets to invest in future growth.
A spokesperson for Just Eat Takeaway said: “Just Eat Takeaway.com has a regular dialogue with all its shareholders and we take all their views very seriously.
“As announced previously, we will be hosting a capital markets day in October to provide the market with increased visibility on how we will capitalise on the exciting, long-term growth opportunities that we have across our business.”