Just Eat Activist Wants Company to Shape Up or Explore a Merger
Cat Rock Capital, which urged Just Eat to merge with Takeaway, now wants one of Europe’s biggest food-delivery companies to fix how it talks to investors and sell assets. And it wants the company to explore a merger.
The U.S. activist investor says Just Eat Takeaway.com (ticker: GRUB) has committed errors that have made it one of the worst-performing among peers. Possible buyers include DoorDash (ticker: DASH), Amazon.com (AMZN), and Amsterdam-based Prosus, which tried to buy Just Eat in 2019.
In 2020, Cat Rock pressed Just Eat, then based in the U.K., to merge with Takeaway.com, of the Netherlands, over a rival bid from Prosus. The combined company then gobbled up GrubHub for $7.3 billion this year.
Cat Rock, one of Just Eat’s top shareholders, alleged in a July presentation that the company failed to convey to investors the costs of its infrastructure investments, and the short-term impact on earnings before interest, taxes, depreciation, and amortization, or Ebitda. Cat Rock said other missteps have left the stock “deeply undervalued.”
For example, DoorDash had $2.9 billion in pro forma 2020 revenue and adjusted Ebitda of $189 million, while Just Eat in 2020 generated $4.6 billion in pro forma revenue and $401 million in adjusted Ebitda. Yet DoorDash has a $59 billion valuation in the U.S.—three times that of Just Eat.
Just Eat told Barron’s it “has a regular dialogue with all its shareholders and we take all their views very seriously.” Just Eat is hosting a capital-markets day in October “to provide...increased visibility on how we will capitalize on...long-term growth opportunities.”
An earlier version of this article said that Cat Rock wanted Just Eat Takeaway.com to sell itself. Cat Rock wants the company to change how it talks to investors, sell assets, and to explore a merger.