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Just Eat Shareholder Wants Merger with Rival Instead of Hunt for CEO

Just Eat Shareholder Wants Merger with Rival Instead of Hunt for CEO

Just Eat, the British online takeaway service, has come under fresh pressure from an activist investor, which is calling for it to merge with a rival rather than appoint a new chief executive.

Cat Rock Capital Management, a US hedge fund that owns a 1.9% stake in Just Eat, sent an open letter to its board to demand a merger with another online food delivery company within the next few months.

It expressed “deep concern regarding the board’s recent appointment of executives who lack online food delivery experience to critical roles at the company, repeating the mistake the board made by appointing Peter Plumb as CEO.” Cat Rock said: “A merger with a well-run industry peer would be a far better outcome for shareholders than relying on the board to choose a new CEO, particularly given the board’s poor record of CEO selection.”

The hedge fund threatened further action before Just Eat’s annual meeting on 1 May if its demands are not met.
Cat Rock pointed to remarks from Jitse Groen, who runs the Dutch rival, in which the hedge fund holds a 4.9% stake.
He has said the UK is one of the best three markets in Europe, along with the Netherlands and Poland, and that he intends to be active in global consolidation., founded in 2000, operates in 10 European countries, Israel and Vietnam.

A Just Eat spokesperson said: “We take communications with all our shareholders extremely seriously. As announced previously, we are carrying out a thorough CEO appointment process and we will update the market as appropriate.” Plumb left abruptly three weeks ago, only 16 months after he joined the firm from and launched an investment drive that slowed earnings growth sharply and is thought to have angered several shareholders.

Plumb upgraded Just Eat’s technology and launched its own delivery service to fight back against mounting competition from Deliveroo and Uber Eats, which have been making heavy losses as they battle for market share. Just Eat started as a marketplace business that links customers to restaurants who take care of their own deliveries.

Just Eat, which made a pre-tax loss of £76m in 2017, dropped out of the FTSE 100 index in December after a 13-month stint. A profit warning pushed its share price to a low of 533.8p in November, although it has since recovered to 718p, up 2% on Monday, taking its loss in the past year to 13%.

The firm’s market value has fallen to £4.87bn, from £5.5bn when it was promoted to the top share index in November 2017.



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