Just Eat’s Grubhub sale goes sour as tech shares continue to slip
Just Eat’s sale of Grubhub may be scuppered as brutal market movements wipe £5bn off its valuation and bosses prepare for a major writedown.
Sources told The Sunday Times that Grubhub is set to be sold at a fraction of the $7.3bn (£5.8bn) Just Eat paid in June last year. Some have even suggested this could fall as low as £1bn.
Despite Just Eat chief exec Jitse Groen calling the acquisition a “winning combination” at the time, the firm has struggled to gain momentum stateside.
The Amsterdam headquartered company has seemingly failed to keep up with DoorDash and UberEats.
Just Eat has been under increasing pressure from activist investor Cat Rock, which has a 5.1 per cent stake in the company.
Shareholders defied Cat Rock’s requests to vote against the reappointment of chief financial officer Brent Wissink and the supervisory board earlier this month at the company’s AGM.
In a letter to shareholders on 25 April, Alex Captain, Cat Rock founder and managing partner, said the firm’s potential was going to waste due to “poor capital allocation, failed financial management, and lack of credibility with capital markets.”
The investor has also been sceptical of the company’s acquisition of its US arm Grubhub, with Captain dubbed the deal as a “capital allocation mistake”.
The stock, like many tech firms, has taken a battering in recent months, with shares tumbling over 65 per cent in the past six months alone.
Just Eat lost its spot on London’s top index last November after previously having a dual listing in London and Amsterdam.