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Food Fight: Just Eat Takeaway Faces Shareholder Backlash

By Dave Simpson

Just Eat Takeaway.com NV TKWY.AS announced the departure of its chairman and an investigation into another senior executive, hours before facing shareholder criticism at a fiery annual meeting on Wednesday 4 May.

Details

Supervisory Chairman Adriaan Nuehn, whose position had been under pressure, would not seek reappointment, Europe's largest online meal delivery firm said prior to the meeting.

Separately, long-time chief operating officer Joerg Gerbig was under investigation for "possible personal misconduct at a company event" and would be leaving the management board at least until it is concluded, the company said.

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Shareholders criticised the recent management of the loss-making firm and questioned the future of its underperforming US arm, Grubhub, purchased last year for $7.3 billion euros ($7.30 billion).

Grubhub's profitability and valuation have been damaged by caps on the commissions it is allowed to charge restaurants in key markets such as New York. It is also facing competition from DoorDash DASH.N and Uber EatUBER.N.

Activist investor Cat Rock, which has pushed for a sale or spin-off of Grubhub, urged the firm to shift focus to its core European business.

"It has to happen, and it has to happen quickly," Cat Rock's founder Alex Captain told the meeting.

Captain asked for guarantees the board would take an offer for Grubhub seriously.

Nuehn replied that the company would "look at any offer that is of interest to all stakeholders".

Pieter Taselaar, founding partner at Lucerne Capital Management, said shareholders had lost faith in management and called for a thorough strategic review.

"Why not announce a full evaluation of all options, a full strategic review of all assets?" he asked.

Chief executive Jitse Groen announced last month he was exploring options including a sale of Grubhub.

Takeaway's shares, which have slid more than 40% in 2022 alone, fell another 8.8% to €24.13 on Wednesday 4 May, down from approximately €110 in October 2020 and not far from the company's 2016 IPO price of €23.

"It is clear that shareholders have concerns about the challenges the company is facing," Nuehn said in a statement confirming he would not seek re-election.

The company's Vice Chair Corinne Vigreux, a co-founder of Dutch electronics group TomTom TOM2.AS, will assume Nuehn's duties while a replacement is sought.

In a second announcement, the company said its supervisory board had recently been informed of a formal complaint regarding Gerbig "relating to possible personal misconduct at a company event".

The company was informed of the complaint on Sunday, Nuehn told the meeting.

Gerbig, who was said to be cooperating with the investigation, did not respond to requests for comment.

Executive behaviour and treatment of employees have been under scrutiny in recent few years, prompting a string of high-profile boardroom departures.

The company said Gerbig's term would end at the closing of Wednesday's meeting, adding it was possible he could be put up for re-election if allegations against him proved unfounded.

In a note, Credit Suisse said Gerbig was considered "well respected in public markets" and that the investigation would add to uncertainty around the company.

Shareholder Pressure

Takeaway, once a stock market darling, saw orders fall in the first quarter as the online food ordering boom faded along with the COVID-19 pandemic in many key markets.

It reported a more than €1 billion loss in 2021, though Groen has said that it is on track to become profitable on an operating basis in 2023.

Both the company's boards and Groen specifically have been criticised for the Grubhub purchase.

Earlier this year, Groen was forced to defend a ski trip for employees to Switzerland in April as an unnecessary luxury, given the company's financial situation. He argued the benefits to morale after two difficult years outweighed the costs.

Cat Rock, the company's second-largest shareholder with a 6.88% stake, published an open letter on April 25 urging shareholders to vote against the reappointment of chief financial officer Brent Wissink and the supervisory board.

That received some support from other investors, including hedge fund Lucerne Capital Management.

However, resolutions to re-appoint members of the management and supervisory board other than Nuehn and Gerbig were approved.

TIMELINE-Just Eat Takeaway Faces Shareholder Backlash Over Dealmaking

The above news followed news that Just Eat Takeaway.com NV TKWY.AS board was under fire on Wednesday 4 May from investors at its AGM who criticised its dealmaking and sagging share price as the boom in online food ordering fades along with the pandemic in many key markets.

Below are the events leading to the showdown at the AGM:

2020:

January - Dutch food delivery company Takeaway.com wins a prolonged battle for control of British peer Just Eat against Dutch internet conglomerate Prosus PRX.AS. The deal creates Europe's largest online meal delivery company.

October - Just Eat Takeaway.com says its shareholders approved its proposed purchase of U.S. rival Grubhub.

2021:

June - Just Eat Takeaway.com completes acquisition of Grubhub for $7.3 billion.

Oct. 15 - Investor Cat Rock increases stake in company to 5.93%.

Oct. 21 - Just Eat Takeaway.com CEO Jitse Groen says he expects Grubhub to eventually be part of a consolidation in the US delivery market, but signals he is not open to selling the business.

Oct. 25 - Investor Cat Rock urges management to consider selling Grubhub, saying divesting or spinning off the unit would improve the company's valuation.

Nov. 10 - Cat Rock repeats its call to divest Grubhub, the day after competitor DoorDash made a big move into European markets with a $8.1 billion purchase of Finland-based Wolt Enterprises OY.

Nov. 17 - Groen says he has no plans to sell Grubhub, but the company is actively looking for strategic partnerships for the business.

December - Cat Rock, the company's second-largest shareholder after Groen, increases stake to 6.88%.

2022:

Feb. 8 - Just Eat Takeaway.com announces it will delist its shares from the Nasdaq stock exchange in a bid to limit costs and regulatory burdens.

Feb.13 - CEO Groen says the decision to de-list from Nasdaq should not be taken as an indication of plans to sell Grubhub.

March - Groen says the company remains in talks to find a strategic partner for Grubhub and that he would be willing to consider a minority position in whatever deal emerges.

April 20 - In an abrupt turnaround, the company says it is looking at selling Grubhub, pressured by investors to revive its shares amid stiff competition and a fading pandemic boost.

April 25 - Cat Rock calls for a major shake-up of the company by voting out its CFO and several members of its supervisory board.

May 4, 2022 - Two of its most senior leaders step down, just hours before the AGM. Shares fall nearly 6%.

Chairman Adriaan Nuehn, whose position had been under pressure, will not seek reappointment while longtime chief operating officer Joerg Gerbig is under investigation for "possible personal misconduct at a company event".

Just Eat Takeaway Chairman Will Not Be Reappointed

All of the above news followed news that hours before the start of the annual shareholder meeting of Just Eat Takeaway.com NV TKWY.AS the company announced that its chairman, Adriaan Nühn, would not seek a new term, and that Corrine Vigreux would take over the position.

Nühn's position had been threatened by shareholders after the company's recent underperformance.

Just Eat Takeaway Faces Shareholder Revolt At AGM, Chairman's Position Shaky

All of the above news followed news that Just Eat Takeaway.com NV TKWY.AS, Europe's largest online meal delivery company, is in for a showdown with its own shareholders at its annual meeting on Wednesday 4 April, with dissent over its sagging share price and strategy, and facing calls for some members of the company's boards to be replaced.

Takeaway, once a stock market darling, faces operational headwinds as the boom in online food ordering is fading along with the COVID-19 pandemic in many of its key markets.

In addition, CEO Jitse Groen has been criticised for his ill-timed purchase of Grubhub, the US business Takeaway bought for $7.3 billion in June 2021, among other issues.

At a first quarter trading update last month, Groen conceded he would have to sell or set up a partnership with the company, which faces competition from the likes of Doordash and Uber Eats. In addition Grubhub's profitability and valuation have been damaged by fee caps on the commissions it is allowed to charge restaurants in key markets such as New York City.

Takeaway's shares closed at €26.45 on Tuesday 3 May, down 45% in the year to date.

Cat Rock, the company's second-largest shareholder after founder Groen with 6.88% of Takeaway shares, published an open letter on April 25, urging shareholders to vote against the reappointment of CFO Brent Wisssink and the company's supervisory board. L2N2WN090

That call has received some support from other investors including hedge fund Lucerne Capital Management.

While shareholder advisory body Glass Lewis does not oppose Wissink's reappointment, it has advised against the re-appointment of chairman Adriaan Nühn, making his position uncertain.

Shareholder rights organization VEB said that it was also critical and would be voting against "the reappointment of the Dutch supervisory board members" including Nühn, it said. Organization spokesman Eric van den Hudding said that Takeaway needs independent members capable of challenging management board decisions.

Takeaway Shares Slump Another 12% To Close Below 2016 IPO Price

All of the above news was followed by news that a fall in the share price of Just Eat Takeaway.com NV TKWY.AS accelerated in late European trading on Thursday 5 May, with the stock closing down 12% at €21.18) in Amsterdam - below the company's 2016 initial public offering price of €23.

The slump follows the abrupt departure of the company's chairman and its top operating executive ahead of the company's fractious annual meeting on Wednesday 4 May.

Shareholders, who have seen the stock fall 50% so far in 2022, criticised the company's board for not challenging management decisions enough, including the $7.3 billion purchase of US rival Grubhub in June 2021.

Takeaway founder and CEO Jitse Groen repeated at the meeting he now plans to either sell or find a partner for Grubhub.

Shareholders urged Groen at Wednesday 4 May's meeting to consider selling other businesses as well in order to focus on the company's core markets in Europe.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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