Simply Eat, the British on-line takeaway service, has come beneath recent stress from an activist investor, which is looking for it to merge with a rival slightly than appoint a brand new chief govt.
Cat Rock Capital Administration, a US hedge fund that owns a 1.7% stake in Simply Eat, despatched an open letter to its board to demand a merger with one other on-line meals supply firm inside the subsequent few months.
It expressed “deep concern relating to the board’s latest appointment of executives who lack on-line meals supply expertise to vital roles on the firm, repeating the error the board made by appointing Peter Plumb as CEO”.
Cat Rock stated: “A merger with a well-run business peer could be a much better end result for shareholders than counting on the board to decide on a brand new CEO, notably given the board’s poor report of CEO choice.” The hedge fund threatened additional motion earlier than Simply Eat’s annual assembly on 1 Could if its calls for usually are not met.
Plumb left abruptly three weeks in the past, solely 16 months after he joined the net meals supply agency from Moneysupermarket.com and launched an funding drive that slowed earnings development sharply and angered a number of high shareholders.
Plumb upgraded Simply Eat’s know-how and launched its personal supply service to struggle again towards mounting competitors from Deliveroo and Uber Eats, which have been making heavy losses as they battle for market share. Simply Eat began as a market enterprise that hyperlinks prospects to eating places who maintain their very own deliveries.
Simply Eat, which made a pre-tax lack of £76m in 2017, dropped out of the FTSE 100 index in December after a 13-month stint. A revenue warning pushed its share worth to a low of 533.8p in November, though it has since recovered to 718p, up 2% on Monday, taking its loss prior to now yr to 13%. The agency’s market worth has fallen to £4.87bn, from £5.5bn when it was promoted to the highest share index in November 2017.
Within the letter, Alex Captain, Cat Rock’s founder and managing associate, strongly criticised the board for appointing Peter Duffy as interim chief govt and significantly contemplating him for the everlasting function, noting that he has no prior on-line meals supply expertise.
Captain stated Cat Rock had instructed two candidates for the highest job who’ve intensive on-line meals supply expertise however the board had didn’t contact one in every of them in time and in addition refused to satisfy the hedge fund in London.
He accused Plumb of constructing poor strategic and working selections as CEO and of dropping various senior executives throughout his tenure, most just lately Chris Simair, the pinnacle of SkipTheDishes, Simply Eat’s Canadian enterprise. Captain stated the agency had didn’t disclose Simair’s departure to shareholders, regardless that he ran the corporate’s second-largest and fastest-growing enterprise and performed a key function in its international supply initiative.
Cat Rock beforehand known as for administration to present monetary targets to the market in addition to contemplating promoting companies comparable to its stake within the Brazilian market chief iFood.