An employee makes a pizza next to a Just Eat Plc delivery bag in the kitchen of The Fat Pizza take away pizza restaurant in Southend-on-Sea, UK on Thursday, December 19, 2019.
Chris Ratcliffe | Bloomberg via Getty Images
LONDON – Just Eat Takeaway.com is one of the largest food distributors in Europe with a market value of $ 17.8 billion. However, one shareholder suggests that the Grubhub owner should be worth a lot more.
“JET’s deeply flawed communications, despite strong operational performance, made it the worst performing online grocery delivery value in two years,” said Cat Rock Capital on Tuesday. The company holds a 4.2% stake in Just Eat Takeaway.
Amsterdam-listed shares of JET are down about 22% this year, while German rival Delivery Hero is down about 2%.
Cat Rock Capital said JET’s revenue multiplier is weaker than that of its competitors. DoorDash, which is expected to generate sales similar to JET this year, is worth more than four times as much as its European counterpart.
JET was created last year from a merger between the British Just Eat and the Dutch operator Takeaway.com. The combined online takeout app subsequently acquired the US company Grubhub, thus beating a competing takeover offer from Uber.
Cat Rock Capital said JET itself is susceptible to being acquired by a competitor – and not at a cheap price.
“Just Eat Takeaway.com is a fantastic company with leadership positions in many of the most valuable online grocery delivery markets and a long history of growth,” said Alex Captain, founder and managing partner of Cat Rock Capital.
“However, JET has failed to improve its communications with investors and the markets since going public, making it severely undervalued and susceptible to takeover bids well below its intrinsic value.”
The investment firm dealt on Twitter with JET CEO Jitse Groen’s sparring with Uber boss Dara Khosrowshahi. Groen accused Khosrowshahi of trying to “drive down” his company’s share price by announcing an expansion of Uber’s Eats delivery business in Berlin, a key market for JET.
JET should explore “strategic combinations” with competitors to bolster the company’s performance, said Cat Rock Capital.
The stock rose more than 2% on Tuesday, although most European markets fell following the release of Cat Rock Capital’s comments. The investment firm, based in Greenwich, Connecticut, is the fifth largest shareholder in JET, according to Refinitiv.
“Just Eat Takeaway.com has a regular dialogue with all of its shareholders and we take all of their views very seriously,” a JET spokesman told CNBC.
“We’re going to have a Capital Markets Day in October to give the market more transparency on how we’re going to capitalize on the exciting, long-term growth opportunities we have across our business.”