A major shareholder in Just Eat Takeaway.com NV on Monday called upon fellow shareholders to reject the reappointment of the online food delivery firm’s chief financial officer and members of JET’s supervisory board, saying they have overseen a ‘catastrophic destruction of equity value’ caused by the company’s Grubhub Inc acquisition and a ‘misleading financial’ outlook.
Cat Rock Capital Management LP, which has a 6.9% stake, said shareholders at JET’s annual general meeting on Wednesday next week should vote against the reappointment of CFO Brent Wissink and ‘legacy members of JET’s supervisory board’.
Cat Rock said Just Eat needs a new CFO to ‘restore credibility’. Wissink has held the role since 2012, having been CFO of Takeaway.com before the two companies merged.
‘JET’s Management and Supervisory Boards have overseen a catastrophic destruction of equity value in the past two years,’ Cat Rock Founder & Managing Partner Alex Captain said in an open letter to shareholders. He noted that shares have lost 75% of their value since the Grubhub acquisition in June 2020, even as JET delivered a strong operational performance.
‘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,’ Captain said, charging that this was caused by a ‘misleading outlook on the company’s profitability’ ahead of two Grubhub shareholder votes.
‘These misleading financial disclosures led to two massive profit downgrades in 2021 and the complete loss of trust in the company’s financial guidance,’ the activist investor said.
Last week, Just Eat Takeaway said it is exploring options for Grubhub. This could involve introducing a ‘strategic partner’ in order to sell a stake, or even all of its holding in Grubhub, which JET had bought for $7.3 billion. Back in October, Cat Rock had called upon the company’s board to sell off Grubhub completely.
A Just Eat spokeswoman told PA in response to the Cat Rock letter on Monday: ‘Just Eat Takeaway.com’s management shares investor disappointment in the recent share price performance of the company. However, the actions we are taking, including in relation to Grubhub, are intended to create significant shareholder value.
‘We believe that Cat Rock’s proposal to remove key supervisory and management board members, would be both value destructive and destabilising.’
Just Eat Takeaway shares were down 3.8% at 2,028.00 pence early Monday in London. They are down 74% in the past 12 months. The former FTSE 100 constituent was removed from FTSE indices back in August after its nationality was reassigned to the Netherlands by FTSE Russell.
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