Standard Digital Edition

Knives out for Just Eat Takeaway

Graeme Evans @EvansOnTheMoney

Major backer calls for sale or spin-off of $7bn US buy-up GrubHub

AN activist shareholder today stepped up pressure on Just Eat Takeaway by urging the food delivery giant (right) to take “immediate action” over its ownership of US venture GrubHub.

Cat Rock Capital, which holds 6.5% of Just Eat shares, wrote to the board saying the industrial and financial logic for a sale or spin-off of GrubHub could not be clearer. It said Just Eat’s share price rose 329% from its 2016 IPO to the day before the GrubHub acquisition in June 2020, but has underperformed the MSCI World Index by 69% since then.

Cat Rock’s founder and managing partner Alex Captain said GrubHub’s future lay with the likes of Amazon, Walmart or Instacart as they look to match the converged food and online grocery offerings of DoorDash and UberEats.

He added: “A deeply depressed stock price poses a real risk to Just Eat’s business, limiting its financial and strategic flexibility, inviting competitors to invest in its markets, and leaving the company vulnerable to takeover bids well below its long-term intrinsic value.”

Just Eat shares rose 31p to 5722p today but Captain believes a sale or spin-off could drive a 100% appreciation as the stock is returned to its rating before the GrubHub deal. Elsewhere in London, mining and oil stocks rallied by as much as 2% today to help the FTSE 100 index to improve by 37.05 points to 7241.67, a gain of 0.5%.

Tesco shares were 2.75p higher at 273.5p despite an attempted hack on its website and app that left customers unable to place orders with Britain’s largest grocer. Its online operations are now fully restored.

In the FTSE 250 index, AI cybersecurity firm Darktrace slumped 12% after analysts at Peel Hunt recommended selling shares following their strong run since listing in April.

They wrote: “While we believe strong growth rates will continue, we also see a disconnect between the valuation and the ultimate revenue opportunity.”

Shares made their debut at 250p and went as high as 985p last month, but Peel Hunt now has a target price of 473p. The stock slumped 117p to 828.5p but the FTSE 250 index rose 14.09 points to 22,945.63.

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2021-10-25T07:00:00.0000000Z

2021-10-25T07:00:00.0000000Z

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