The boss of Just Eat Takeway has rejected calls for the business to sell out to a rival after it came under attack by activist investors.
Jitse Groen, chief executive of Just Eat, said a merger with a bigger rival was “not absolutely logical at the moment” in response to demands from activist fund Cat Rock that the food delivery firm explore a sale.
Mr Groen added that the company would not be interested in talks with rivals that are “very loss-making”.
His remarks came as rival Deliveroo’s shares climbed above its float price for the first time. Deliveroo shares rose to 393p in early trading on Tuesday, above its initial public offering price of 390p. Deliveroo lost £2bn in market value on its first day of trading in March.
Just Eat has been spending heavily on marketing and hiring riders to challenge Deliveroo in its biggest market, London, in an effort to emerge as the number one food delivery player after years of under investment.
Mr Groen, 43, has come under pressure from investors who are demanding results after Just Eat fell into the red on the back of its expansion efforts. Shares in the Anglo-Dutch food delivery company are down 24pc so far this year.
Cat Rock, a fund founded by hedge fund manager Alex Captain, had led calls for Just Eat to explore a sale to a rival, suggesting larger operators such as DoorDash, Uber and Delivery Hero as potential buyers.
Mr Captain, whose fund owns 4.7pc of Just Eat, also warned the food delivery boss against using the social network Twitter to attack rivals.
Just Eat Takeaway chief Jitse Groen
Credit: JEROEN BOUMAN
Mr Groen said on Tuesday that his social media remarks were “not meant as investor education… it is just something on Twitter”. However, he admitted the company needed to improve communications with its shareholders.
He said: “It was a Tweet, a reaction. I guess it was entertaining.”
Mr Groen was speaking as Just Eat reported a 52pc surge in revenues to €2.6bn (£2.2bn) in the six months to the end of July. However, the company said underlying pre-tax losses totalled €190m compared with a €205m profit a year earlier on the back of increased investment and rising delivery and staff costs.
Rules capping the fees delivery companies can charge in the US have also led to €142m in lost revenues, Just Eat said.
Fee caps were introduced in markets such as New York during the pandemic, but in many cases have been extended, despite restaurants being allowed to reopen as pandemic restrictions eased. Just Eat’s US arm, Grubhub has challenged the fees with rival Doordash in court in San Francisco.
Mr Groen said it was “unfortunate that those fee caps have been extended and we are going to have to swallow that difference”.
Giles Thorne, an analyst at Jefferies, said: “The language around the impact of fee caps in the US has worsened, with management now acknowledging that some caps have been prolonged longer than expected.”
Just Eat shares rose 4pc on Tuesday.