AMSTERDAM, Oct 25 (Reuters) - Investor Cat Rock, one of the
largest shareholders of online food ordering company Just Eat
Takeaway.com, on Monday urged the company's management
to consider the sale of its U.S. arm GrubHub.
Cat Rock, which holds a 6.5% stake in Takeaway, said selling
or spinning off the unit would improve the valuation of
Takeaway, which has lagged peers over the past year.
Amsterdam-based Takeaway, Europe's largest meals ordering
company, only completed its $7.3 billion acquisition of GrubHub
in June. Cat Rock did not call for the sale of GrubHub's
significant Canadian and Australian operations.
"A deeply depressed stock price poses a real risk to
[Takeaway'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," Cat Rock founder Alex Captain said
in an open letter addressing company management.
Takeaway said in response that it had only acquired GrubHub
four months ago. "While Grubhub has some specific challenges
today it is a large and growing business with good underlying
profitability," the company said.
At an Oct. 21 meeting with investors Takeaway CEO Jitse
Groen outlined his strategy for defending market share in the
U.S. by investing where the company is already strong,
particularly in New York City where it is the biggest
Cat Rock's Captain, a long-time shareholder, argued that
Grubhub's origins as a meal ordering platform left it at an
logistical disadvantage to delivery-based competitors such as
DoorDash and Uber. However Grubhub would be
highly valuable to Amazon, Walmart or Instacart
he said, and urged action by the end of this year.
Takeaway founder Groen, who is the company's second-largest
shareholder with a 7.3% stake, told investors last week that he
believed there would "over time inevitably be consolidation" in
the U.S. delivery market and Grubhub would participate.
In a note analysts at Credit Suisse agreed with Cat Rock
that a sale "could add value" but a sale by year end would be a
difficult timeline to meet.
(Reporting by Toby Sterling; Editing by Kirsten Donovan)