Just Eat told to speed up, ditch assets by US hedge fund

LONDON: Just Eat Plc, the UK food delivery company, is facing calls by a shareholder to speed up its decision-making and consider the sale of non-core assets.

Cat Rock Capital Management LP recommended Just Eat’s board considers selling its minority stake in Brazilian startup iFood, arguing it could generate up to £650mil (US$755mil) that could potentially be returned to investors.

“Further delays in planning and decision-making will only continue to destroy shareholder value,” Alex Captain, founder of Cat Rock, said in a statement yesterday.

Just Eat is facing increasing competition from new rivals including Deliveroo and Uber Eats. The food delivery operation of Uber Technologies Inc is looking to expand how users can pay for meals and generate more business via its website rather than its app – a key part of Just Eat’s business. ”We have a clear strategy in place to deliver long-term sustainable value for our shareholders,” said a Just Eat spokesman in a statement.

Just Eat’s share price has fallen about 26% this year. In last month’s third-quarter update, the Borehamwood, UK-based company lowered its full-year outlook for adjusted Ebitda, mixed with higher guidance for revenue and noted investments in deliveries and Latin America.

Shares in Just Eat rose as much as 1.2% in trading in London yesterday.

A small hedge fund with around US$850mill under management, Cat Rock is Just Eat’s 18th largest shareholder, with a stake of about US$50mil, according to data compiled by Bloomberg. Cat Rock said in the statement it owns 13 million shares, representing about 2% of its outstanding stock.

Cat Rock also has investments with Takeaway.com and Delivery Hero, according to its statement and has been a shareholder in Just Eat for about two years. — Bloomberg