Takeaway.com and Just Eat tie-up could have Cat Rock purring

US HEDGE fund Cat Rock Capital looks set to land on its feet if a proposed £9bn merger between Just Eat and Dutch rival Takeaway.com can be delivered, thanks to its sizeable stakes in both food delivery app operators.

The previously little-known activist investor has been waging a campaign for radical action at Just Eat from its Connecticut offices since December last year. It launched a website titled “Just Eat must deliver” and agitated against chief executive Peter Plumb, who left soon after. “Just Eat clearly needs a world-class management team with online food delivery experience,” the fund said in February, warning of the threat from younger rivals such as Deliveroo and Uber Eats.

Cat Rock raised concerns that interim Just Eat boss Peter Duffy, who replaced Mr Plumb, would stay on, advocating instead for a merger with a “well-run industry peer” to help it scale up.

The fund, helmed by Harvard-educated Alex Captain, was steering to- wards a major industry consolidation with Takeaway.com, in which it is also a major shareholder. The combination would be a notable victory for Mr Captain, who founded Cat Rock in 2015 after working for another big cat, $30bn (£24bn) hedge fund Tiger Global Man- agement.

At US investment conferences he has argued that the internet’s low penetration of the food delivery market, which is estimated to be worth £81bn worldwide, presented an opportunity for major growth and that European players were ripe for consolidation. In an interview with CNBC last year, Mr Captain said M&A activity involving Takeaway.com would be the “cherry on the cake”, but that he was confident in its strength regardless. At the end of last year Cat Rock’s influence was viewed as instrumental in Takeaway.com’s takeover of the German operations of rival Delivery Hero.

Dutch entrepreneur Jitse Groen launched Takeaway.com from his university dorm room in 2001, growing it to operate across 44,000 restaurants and 12 countries.

Cat Rock holds 4.9pc of the company, alongside 2.6pc of Just Eat, which started in Denmark in 2001. Full details of the merger are expected in the next two days, but it is widely expected that Mr Groen – who has previously labelled the UK one of Europe’s three best takeaway markets, alongside the Netherlands and Poland – will take the chief executive position at the combined company.

Cat Rock disclosed its position in Just Eat in October, before the competition regulator cleared the company’s merger with rival Hungryhouse. The activist had a position in Takeaway. com then, which it ramped up in 2018.