A shareholder of Just Eat wants the merger with his rival rather than looking for a CEO | Business

Just Eat, the UK's online takeaway service, is under new pressure from an activist investor, who asks him to merge with a rival rather than appoint a new general manager.

Cat Rock Capital Management, a US hedge fund holding 1.7% stake in Just Eat, has sent an open letter to its board of directors to request a merger with another online food distribution company in the next months.

He expressed "his deep concern over the recent appointment of board members who lacked experience in delivering online food to critical positions in the company, repeating the error made by the board of directors. administration by appointing Peter Plumb as CEO ".

Cat Rock said: "A merger with a well-managed sector counterpart would be a much better outcome for shareholders than relying on the board to choose a new CEO, especially given the board's poor track record in selection of the CEO. " The hedge fund has threatened to take further action before the annual Just Eat meeting on May 1 if its demands are not met.

Plumb left abruptly three weeks ago, just 16 months after joining Moneysupermarket.com, the online food distribution company, and launched an investment campaign that had sharply slowed earnings growth and upset several big shareholders.

Plumb upgraded Just Eat's technology and launched its own delivery service to combat growing competition from Deliveroo and Uber Eats, which suffered heavy losses as they struggled to gain market share. Just Eat started as a market company that connects customers to restaurants that handle their own deliveries.

Just Eat, which recorded a pre-tax loss of £ 76m in 2017, has withdrawn from the FTSE 100 index in December, after a 13-month pbad. A profit warning lowered its stock price to a record low of 533.8pp in November, although it has since recovered to 718pud, up 2% on Monday, bringing its 13% loss over the past year. of the past year. The company's market value dropped to £ 4.87 billion from £ 5.5 billion when it was promoted to the best stock index in November 2017.

In the letter, Alex Captain, founder and managing partner of Cat Rock, strongly criticized the board of directors for appointing Peter Duffy as Acting Director General and seriously considering him to replace him, noting that he was had no experience in distributing meals online.

The captain said Cat Rock had suggested two high-profile candidates with extensive online food delivery experience, but that the board had failed to contact him. one of them on time and had also refused to meet the hedge fund in London.

He accused Plumb of making bad strategic and operational decisions as CEO and of losing several senior executives during his tenure, most recently Chris Simair, head of SkipTheDishes, the company. Canadian Just Eat. Captain said the firm did not reveal Simair's departure to shareholders, even as he ran the company's second-fastest-growing company, while playing a key role in his global delivery initiative. .

Cat Rock has previously called on management to set financial targets for the market and consider selling companies such as its stake in the Brazilian market leader, iFood.