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MarketScreener Homepage  >  Equities  >  Xetra  >  Delivery Hero    DHER   DE000A2E4K43

DELIVERY HERO

(DHER)
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Investor Cat Rock points way towards Just Eat merger with Takeaway.com

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02/11/2019 | 07:29am EDT
FILE PHOTO: A cyclist delivers food for Deliveroo in London, Britain

(Reuters) - An activist investor urged online food delivery firm Just Eat to pursue merger talks with a peer such as Takeaway.com, saying on Monday it did not trust the board to get the appointment of a new CEO right.

Cat Rock Capital, which has stakes in both Just Eat and Dutch-listed Takeaway.com, said Just Eat was likely to attract significant interest from potential partners if it chose to seek a deal as a route to strong management and growth.

In a letter to the Just Eat board, it cited Takeaway.com CEO Jitse Groen as saying that the UK was one of the best markets in Europe and that he intended to be active in consolidation.

The letter said there was a clear rationale for Just Eat to combine with a peer.

"A merger could make Just Eat dramatically more formidable as it competes to secure its market position against Uber, Deliveroo and others," the letter said.

Cat Rock's statement comes only three weeks after Just Eat CEO Peter Plumb left the company in the wake of criticism from Cat Rock and some other shareholders about his plan to grow earnings.

Peter Duffy, who joined Just East as chief customer officer last June, has been appointed as interim CEO but Cat Rock said he too lacked relevant experience in the food delivery industry.

Just Eat made no direct comment on the criticisms.

"We take communications with all our shareholders extremely seriously. As announced previously, we are carrying out a thorough CEO appointment process and we will update the market as appropriate," a Just Eat spokesman said in an email.

Plumb's strategy demanded increased investment, causing earnings growth to slow sharply, and Cat Rock, founded by Alex Captain, has complained the company had become the world's worst performing online food delivery stock.

"Cat Rock argues that a merger with a well-run industry peer would be a far better outcome for shareholders than relying on the board to choose a new CEO, particularly given the board's poor record of CEO selection," said Connecticut-based Cat Rock which has a stake of around 1.9 percent in Just Eat.

INDUSTRY MOVES

Shares in Just Eat rose 1.9 percent to 717 pence in London by 1130 GMT, valuing the company at around £4.9 billion.

Takeway.com, in which Cat Rock owns a 4.9 percent stake, has a market value of around 2.5 billion euros (£2.19 billion).

Investor Cat Rock points
way towards Just Eat merger with Takeaway.com :

A potential merger would come at a time of consolidation in the market, with Germany's Delivery Hero selling a Swiss business to Takeaway.com last June and its operations in Germany to the same firm in December.

"The letter was sent outside our knowledge. We don't have any comments with regard to the content of it," a Takeaway.com spokesperson said.

Cat Rock also said in December that Just Eat, which delivers meals from local takeaways as well as big brands such as Burger King, KFC and Subway, should consider selling businesses such as its stake in Brazilian market leader iFood.

Just Eat's stock shed a quarter of its value in 2018, after enjoying rapid expansion since its 2014 float at a price of 260 pence per share. The slump forced it out of London's bluechip index in December.

Delivery Hero declined to comment when asked if it would be interested in teaming up with Just Eat.

(Reporting by Karina Dsouza and Noor Zainab Hussain in Bengaluru; Additional reporting by Paul Sandle in London, Samantha Machado in Bengaluru and Nadine Schimroszik in Berlin:; Editing by Rashmi Aich and Keith Weir)

By Karina Dsouza and Noor Zainab Hussain

Stocks mentioned in the article
ChangeLast1st jan.
DELIVERY HERO 7.17% 38.28 Delayed Quote.9.85%
JUST EAT -0.27% 740 Delayed Quote.26.31%
TAKEAWAY.COM -0.38% 77.9 Delayed Quote.32.99%
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Financials (€)
Sales 2018 766 M
EBIT 2018 -203 M
Net income 2018 -137 M
Finance 2018 439 M
Yield 2018 -
P/E ratio 2018 -
P/E ratio 2019
EV / Sales 2018 8,11x
EV / Sales 2019 5,59x
Capitalization 6 656 M
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Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 44,3 €
Spread / Average Target 25%
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Niklas Östberg Chief Executive Officer
Martin Karl Enderle Chairman-Supervisory Board
Pieter-Jan Vandepitte Chief Operating Officer
Emmanuel Thomassin Chief Financial Officer
Christian von Hardenberg Chief Technology Officer
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