Cat Rock Capital, one of Just Eat Takeaway.com’s (JET) biggest shareholders, advised the Dutch delivery firm to sell or spin off the U.S. platform Grubhub, Cat Rock said in a press release on Wednesday (Nov. 10).
Selling or spinning off the delivery firm Grubhub would boost JET’s valuation, Cat Rock said, advising the company to refocus its business on Europe and “unlock the significant value of Grubhub” by consolidating with a company that is focused on the U.S.
Cat Rock holds a 6.5% stake, approximately 14 million shares. Grubhub stockholders approved JET’s acquisition of the former on June 10.
See also: Grubhub Stockholders Approve Acquisition By Just Eat Takeaway
“Cat Rock has spent over six years researching the online food delivery sector and has been a shareholder of JET and its predecessor companies for over four years,” said Alex Captain, founder and managing partner at Cat Rock Capital Management.
“Our views on JET’s strategy reflect our enthusiasm for the company’s long-term prospects and value assuming focused execution and pragmatic strategic action,” Captain added.
The call by Cat Rock to unload Grubhub started two weeks ago, but JET declined, saying that it had acquired the U.S. delivery platform only four months prior and is “excited by Grubhub’s potential.”
Read more: Just Eat Takeaway.com To Double Down On Strong US Markets Following Grubhub Acquisition
In response, Cat Rock did a deep dive into the food delivery sector and put together a presentation to further make its case that divesting Grubhub is in the best financial interest of JET.
“We believe Just Eat Takeaway.com should act expeditiously to refocus its business on Europe, where it is the clear market leader in online food delivery and best-positioned to capture the incredibly large same-day delivery opportunity,” Captain said.
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