Trust that has been “breached.” A management that “performs unimaginably badly” and has “misled” shareholders. And that, moreover, is the main culprit of a “catastrophic” loss of stock market value.
The American investor Cat Rock has Monday morning in a letter to shareholders of Just Eat Takeaway (JET) to the top of the meal delivery platform. With 6.9 percent of the shares, after founder Jitse Groen (7.1 percent), Cat Rock is the largest shareholder in the company, which is struggling with large losses and a falling stock price. Just Eat Takeaway, parent company of Thuisbezorgd.nl, is the largest meal delivery platform in the world after the Chinese Meituan.
Cat Rock will vote next Wednesday at JET’s annual shareholders’ meeting against the reappointment of the supervisory board and financial chief Brent Wissink. Last week, hedge fund Lucerne Capital, which owns 1 to 2 percent of the shares, already announced it would do the same. Lucerne CEO Pieter Taselaar will also argue for the departure of Jitse Groen at the meeting, he told NRC† “That man can’t go on like this.”
Whether other shareholders support Lucerne and Cat Rock in their opposition is unclear. Opposite NRC, which approached the twenty largest shareholders of JET, said those involved do not want to prejudge the conclusions of the shareholders’ meeting. Eumedion, the representative for large institutional investors, expects a response from the JET board before the meeting, says director Rients Abma. The organization will have a meeting with the company’s top about the allegations sometime in the coming days, an appointment that was already planned. On this basis, participants determine their position in the voting, Abma says.
Just Eat Takeaway called Cat Rock’s proposal “both destabilizing and value-destroying” – “We have always acted in good faith.” Brent Wissink does not respond.
Also read an interview with Pieter Taselaar, CEO of Lucerne Capital. ‘Top man Jitse Groen is megalomaniac and stubborn’
Critical Mistake
Since Just Eat Takeaway announced in June 2020 that it plans to buy the American meal delivery company Grubhub for 6.4 billion euros, JET has lost three quarters of its market value; about 16 billion euros. Grubhub is currently losing out to competitors UberEats and Doordash in the US. According to Lucerne and Cat Rock, JET made a crucial mistake by buying Grubhub too soon, barely a year after the merger between the Dutch Takeaway and the British meal delivery company Just Eat was completed.
According to Cat Rock founder Alex Captain, JET presented a “misleading financial outlook” when shareholders were asked to approve the purchase. Shortly after the acquisition was completed, however, it turned out that a limited loss over 2021 would be considerably larger. “That has seriously damaged investor confidence in management,” said Captain.
Cat Rock has often openly criticized the JET summit in recent months. The investor already founded the website last year Just Eat Must Deliver to urge the company’s executives to do more against the falling stock price.
In the past, the hedge fund showed itself to be a fanatic supporter of the growth plans of CEO Jitse Groen. In early 2019, it was Cat Rock who first suggested that Just Eat would do well to join Takeaway. In this way, the British group could benefit from the ‘world-class management team’ at the Dutch peer.
Growth slumped
Since the IPO in 2016, JET (EUR 5.3 billion in turnover, 18,000 employees) has proved an attractive investment for a long time. The delivery platform grew by tens of percent annually and showed itself ambitious with acquisitions. During the corona pandemic, JET took advantage of the lockdowns and the reluctance of consumers to go to the supermarket. But with the reopening of the economy, growth completely slumped.
Last quarter, JET handled fewer orders for the first time than a year earlier, it emerged last week when it presented figures on this. A few months earlier, JET had already announced that it had suffered a loss of 1 billion euros last year. To reassure shareholders, JET announced that it was “actively seeking” a strategic partner or considering a “part or all sale” of Grubhub.
CEO Jitse Groen traveled to New York at the end of last week to reassure investors there. He also explained another point of concern: a recent company outing of 5,000 JET employees to Arosa, Switzerland. According to Bloomberg news agency, 15 million euros had been earmarked for the ski trip.