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A hedge fund wants Just Eat to merge with another of its investments

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
Under pressure: The Just Eat app logo is displayed on an iPhone. Photo: Carl Court/Getty Images
Under pressure: The Just Eat app logo is displayed on an iPhone. Photo: Carl Court/Getty Images

A US hedge fund with a 2% stake in takeaway company Just Eat (JE.L) is pushing for the company to merge with a rival platform that it is also invested in.

Cat Rock Capital Management said on Monday that it had sent an open letter to Just Eat’s board calling for “good-faith merger discussions with its industry peers.” It named, which Cat Rock also backs, as a potential target.

The merger pressure comes after a period of sustained underperformance of Just Eat’s share price and the departure of its CEO last month.

“We have spoken with many other shareholders, and many of them share our conclusion — a fair merger is a far better alternative than relying on the Board, with its poor record of executive selection, to choose a new leader for the Company,” Alex Captain, the founder and CEO of Cat Rock, said in the letter.

“We would expect that there would be significant strategic interest in a merger from other industry participants. For example, Jitse Groen, the CEO of (in which we and many other Just Eat shareholders are also invested), has publicly said that the UK is one of the three best markets in Europe and, separately, that he intends to be active in global consolidation.” is Cat Rock’s largest shareholding, with just over a 5% stake in the Dutch business. Last year acquired the German operations of rival Delivery Hero.

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,” a Just Eat spokesperson said.

The pressure comes after a turbulent 18 months for Just Eat. The online takeaway firm’s share price declined by almost 30% in 2018 and CEO Peter Plumb left last mont.

Cat Rock, which is based in the US hedge fund capital of Connecticut, first began publicly pushing for change at Just Eat in December, saying the board must put in place a new strategy and financial targets for then-CEO Plumb.

In its letter on Monday, the investment firm said “the Board is squarely on the path to repeat the serious mistakes that led to Mr. Plumb’s appointment.” Cat Rock expressed concern that the board is looking at CEO candidates that do not have experience within the takeaway industry.

“In a fast-moving space like online food delivery, an executive who is trying to learn the business cannot effectively lead the business,” Captain wrote.

Just Eat’s app and website allows people to order takeaways from a wide variety of restaurants. It operates in 12 countries around the world and processed over 100m orders last year. The company competes with the likes of Deliveroo, UberEats, and

Shares in the company were up by 1.9%.


Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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