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Activist urges investors to move against Just Eat Takeaway’s board

Just Eat Takeaway.com is set for a showdown with investors at next week’s annual meeting, with one top shareholder alleging that the company misled shareholders on its financial firepower ahead of two crucial votes to approve last year’s $7.3bn Grubhub deal.

Cat Rock Capital, one of the food delivery group’s top five shareholders, published an open letter on Monday calling on other investors to join it in voting against the re-election of finance chief Brent Wissink and most of JET’s supervisory board, including its chair, Adriaan Nuhn, at the meeting in Amsterdam on May 4.

In the letter, seen by the Financial Times, Cat Rock’s founder and managing partner, Alex Captain, said JET’s management and supervisory boards had “failed all stakeholders”, overseeing a “catastrophic destruction of equity value in the past two years”.

Cat Rock’s letter follows an earlier declaration by another JET investor, Lucerne Capital, that it planned to vote against the re-election of Wissink and the six-person supervisory board next week, as well as abstaining from voting to re-elect Jitse Groen as chief executive.

Despite the huge boost to food delivery apps provided by two years of sporadic lockdowns, Just Eat Takeaway’s stock has lost more than two-thirds of its value since it announced the acquisition of US food delivery group Grubhub in June 2020.

Groen said last week that JET was now assessing whether to sell some or all of Grubhub, less than a year after the deal closed, as well as downgrading its growth forecasts for the year.

Captain hopes a new chief financial officer could “restore credibility with the capital markets” after the company underestimated the scale of its losses in the past two years.

“JET’s management and supervisory boards torpedoed the company’s share price by providing a misleading outlook on the company’s profitability in advance of the Grubhub shareholder votes in October 2020 and June 2021,” Captain said. “These misleading financial disclosures led to two massive profit downgrades in 2021 and the complete loss of trust in the company’s financial guidance.”

Jitse Groen, Just Eat Takeaway’s chief executive, had in Cat Rock Capital one of the company’s biggest supporters until last year © Bram Belloni/FT

JET said its management team “shares investor disappointment in the recent share price performance” but recent actions such as potentially selling Grubhub “are intended to create significant shareholder value”. 

“We have always acted in good faith and in line with our obligations with regard to our market communications, including in respect of the Grubhub acquisition,” JET said.

“We believe that Cat Rock’s proposal to remove key supervisory and management board members, would be both value destructive and destabilising.”

Until last year, Connecticut-based Cat Rock, which owns 6.9 per cent of JET, had been one of the company’s biggest cheerleaders. It successfully pushed for the merger of Takeaway.com, which Groen founded 22 years ago, and UK-based Just Eat, in early 2020. Captain said then that Groen’s experience as an entrepreneur and operator could help revive Just Eat, which was suffering as Uber Eats and Deliveroo took market share.

But Captain has lost patience with Groen in recent months, first urging him to unwind the Grubhub deal last summer.

Meanwhile, Institutional Shareholder Services, an influential investor advisory group, has recommended that its clients vote against the re-election of Nuhn, JET’s chair, citing concern over lack of gender diversity on the board.

ISS does, however, recommend voting in favour of the re-election of the management board, including Groen and Wissink, saying in its report this month that there was “no known controversy” surrounding the candidates.

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