Just Eat Takeaway rebuffs call to sell Grubhub


Just Eat Takeaway.com has insisted it has a “clear improvement plan” for Grubhub after coming under renewed pressure from an activist investor to sell or spin off the US food delivery business by the end of 2021.

Just Eat Takeaway.com completed its $7.3bn acquisition of Grubhub only four months ago but its share price has fallen more than 32 per cent this year, prompting investors to call for it to sell off assets or risk a hostile takeover.

Cat Rock, a Connecticut-based activist investor, has built a 6 per cent stake in Just Eat Takeaway.com and said on Monday that the board had so far “failed to fix the deep and damaging undervaluation of its equity by taking tangible action to unlock the value of its portfolio”.

It added that Just Eat Takeaway.com had been distracted by Grubhub and the acquisition had reduced the group’s financial flexibility.

Alex Captain, the founder of Cat Rock, said that the group’s recent capital markets day “only highlighted the magnitude of the problem” and that the company trades at less than eight times its projected earnings before interest, taxes, depreciation and amortisation for 2022.

Cat Rock, which invested in Takeaway.com as early as 2017, suggested that selling Grubhub to Amazon Whole Foods to improve competition in the US food delivery market. It added that Instacart or Walmart could also use Grubhub to compete against DoorDash and Uber Eats.

Another large investor, Oceanwood Capital Management, has previously made similar calls for divestments.

Just Eat Takeaway.com said that “while Grubhub has some specific challenges today, it is a large and growing business with good underlying profitability”. It added that it had a “clear improvement plan to refocus Grubhub” and remained “excited by Grubhub’s potential”.

However, it added that the business had “significant strategic value” and that it would take part in the wider consolidation of the US market.

“The management team expects to be involved in this consolidation when it comes and intends to do so from a position of strength that reflects the strategic value of Grubhub,” it said.

Just Eat Takeaway.com’s share price has fallen 4.5 per cent since its capital markets day on Thursday.


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