Simply Eat Takeaway’s largest unbiased shareholder has stated traders ought to vote to fireplace the takeaway meals web site’s supervisory board and chief monetary officer amid a gentle decline in its market worth.
Cat Rock Capital, a Connecticut-based activist investor, stated in an open letter revealed on Monday that Simply Eat had “torpedoed the corporate’s share value by offering a deceptive outlook” earlier than its $7.3bn (£5.7bn) takeover of rival Grubhub in a deal struck in 2020.
The meals supply trade expanded massively through the coronavirus pandemic lockdowns, and Jitse Groen, the founding father of the Dutch Takeaway.com, tried to develop the corporate via two massive offers.
The Amsterdam-listed Simply Eat Takeaway (JET) was shaped in 2020 via the merger of Takeaway.com and its British rival Simply Eat. It then purchased Grubhub to offer the corporate entry to the large US market, however the firm final week appeared to just accept the deal was an error after saying it was on the lookout for a “strategic associate” or a sale.
Simply Eat Takeaway’s market worth rose as excessive as €17.4bn (£14.7bn) in early 2021, earlier than a sequence of revenue downgrades led to a sell-off that prompted its worth to fall to €5.5bn on Monday.
Cat Rock stated that the corporate had “destroyed” €16bn in fairness worth due to a “full lack of belief within the administration and supervisory boards’ capital allocation and monetary administration”.
The investor, which owns a 6.9% stake with 14.8m shares, stated it can vote in opposition to a sequence of shareholder resolutions on the annual assembly in Amsterdam on 4 Might. They embrace voting in opposition to the supervisory board, the re-election of the chief monetary officer, Brent Wissink, and the authority of the board to situation new shares. It additionally stated it can abstain in a vote on Groen, who’s JET’s chief govt and its largest shareholder, with 7.1% of shares.
One other shareholder, Lucerne Capital, has additionally stated it can vote in opposition to the board and Wissink.
Alex Captain, Cat Rock’s founder and managing associate, stated the Grubhub deal was a “capital allocation mistake” that had led to a 75% inventory market decline regardless of the meals supply growth doubling gross sales.
“We consider the majority of the worth destruction occurred as a result of JET administration gave traders a deceptive monetary outlook upfront of the 2 Grubhub shareholder votes, main to 2 large revenue downgrades in 2021 and shattering investor belief in administration,” he stated.
“JET wants a brand new chief monetary officer to revive credibility with the capital markets and a brand new supervisory board to rapidly refocus the enterprise on Europe, use the proceeds of divestitures to strengthen JET’s capitalisation, and actively consider different strategic choices.”
Simply Eat Takeaway stated the removing of the board can be “each worth damaging and destabilising”.
“JET’s administration shares investor disappointment within the current share value efficiency of the corporate,” it stated. “Nonetheless, the actions we’re taking, together with in relation to Grubhub, are supposed to create important shareholder worth.
“We’ve got all the time acted in good religion and in keeping with our obligations with regard to our market communications, together with in respect of the Grubhub acquisition.”