Is Just Eat Take-Out Specialist (JE.L) about to be released?
US hedge fund Cat Rock Capital Management on Monday called for the merger of its company with a rival to solve its current leadership problems. Just Eat is indifferent to the suggestion.
But the commotion is emblematic of a difficult relationship between Just Eat and its investors over the past year and threatens to spiral if Just Eat does not act quickly. The last time Cat Rock publicly called for changes, Just Eat lost his CEO.
Peter Plumb left Just Eat as CEO on Jan. 21, in part after Cat Rock called for a strategy shift last December. Plumb joined Moneysupermarket.com and oversaw a 30% decline in share price in 2018. Cat Rock, which owns a 2% stake in Just Eat, expressed more general dissatisfaction among its shareholders.
Cat Rock, based in Greenwich, Connecticut, now wants the company to appoint an experienced CEO in the online take-out sector.
Yahoo Finance UK understands that Cat Rock has suggested two candidates and a consultant with online sales experience to take part in the process. All three have not yet been included by Just Eat.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Lack of action put the CEO of Cat Rock and founder Alex The captain's nose is breaking. The fund manager said he did not trust the board's judgment after Plumb. Cat Rock fears that Just Eat is again making the same mistake with Peter Duffy, the current interim CEO, who joined easyJet's delivery company last May and is supposed to be running for a permanent position . "Data-reactid =" 29 "> The lack of action put Cat Captain Captain and CEO, Alex Captain, in a stalemate. The financial manager said he was not trusting at the board after Plumb Cat Rock fears that Just Eat is again making the same mistake with Peter Duffy, the current interim CEO, who joined the easyJet delivery company last May and who is supposed to be candidate for a permanent position.
"In a rapidly evolving space like online food delivery, a leader is trying to learn that the company can not run the business effectively," writes Captain in a Monday letter.
Plumb did not leave until three weeks ago and it is not uncommon for CEO searches to take months. Just Eat refused to comment on the process, but head hunting is thought to be in its infancy.
Captain argued that the best course of action now is to find a rival with a strong management team and to merge the two companies.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The captain floated Takeaway.com (TKWY.AS) as a potential partner, which some might consider cynical – Cat Rock also holds a 5% interest in this business. The captain emphasized Monday during a telephone conversation with analysts that he was open to a range of possible partners. DoorDash, GrubHub (GRUB) and Postmates are among the other companies in this sector. "Data-reactid =" 34 "> The captain announced the launch of Takeaway.com (TKWY.AS) as a potential partner, which some might call cynical – Cat Rock also captain pointed out at a telephone conversation with analysts Monday that it was open to a range of potential partners, including DoorDash, GrubHub (GRUB) and Postmates.
A merger proposal may be well received elsewhere in the industry. The growing competition from UberEats and Deliveroo, both of which have large financial means, have left companies looking for contracts in a growth perspective. Takeaway.com recently made the acquisition of Delivery Hero (DHER.F) and there was even talk of a rapprochement between Uber and Deliveroo.
"The general opinion is that there will probably be a lot of mergers and acquisitions in space in the coming months," commented JPMorgan analyst Marcus Diebel in early February.
"Many investors agree with our view that Just Eat has attractive valuations and a mergers and acquisitions option."
Just Eat's shares rose more than 4% on Monday, suggesting investors are excited about the talks. The key question is whether Cat Rock can garner enough support to get the board to change its mind.
After all, the hedge fund is not even listed in the company's top 10 stocks and Just Eat seems to be trying to contain Cat Rock.
A spokesman for Just Eat told Yahoo Finance UK: "We take communications with all of our shareholders very seriously. As previously announced, we are proceeding with a thorough appointment process for the Chief Executive Officer and will update the market, as appropriate. "
Just Eat views the company as one of the many shareholders and is reluctant to engage unfairly in Cat Rock. While she regularly speaks to the company, a recent offer of meeting with the representatives of Cat Rock in London has been postponed.
Communication will be the key. To date, many residents of the city believe that Just Eat's main problem is its inability to properly implement its strategy and manage investor expectations.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Just Eat's management did not say anything in response to Deliveroo's announcement last year to invest heavily in the UK," said Yahoo Finance Grant Fuller, CEO of Irithmics, a specialist in investor confidence at AI."data-reactid =" 44 ">" The management of Just Eat did not say anything in response to Deliveroo's announcement last year to invest heavily in the UK, "said Yahoo Finance Grant Fuller , CEO of Irithmics, investor confidence specialist at AI.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""When Just Eat's management did not give assurances that it was not put off by Deliveroo's competition, its investors reacted negatively," said Fuller, commenting on the changes his software made to the portfolios. investors at the time. "Investors even hesitated for a week, probably waiting for direction.""data-reactid =" 45 ">" When the management of Just Eat did not give the assurance that she was not put off by Deliveroo's competition, her investors reacted negatively ", said Fuller, commenting on the changes made to his software investor portfolios at the time. "Investors even hesitated for a week, presumably waiting for management."
The story continues