Rather than look to replace him, Cat Rock, which owns a 1.7% stake in Just Eat, has urged the board to opt for a merger instead, blaming a poor record of CEO selection in the past.
“The board’s experiment of appointing an industry outsider like Mr Plumb to the CEO role failed miserably,” Cat Rock said on Monday.
The hedge fund added that it intends to take further action ahead of May’s annual general meeting should bosses continue to ignore shareholder feedback.
It is not the first time that Cat Rock has called out Just Eat’s top brass.
Back in December, it complained that the FTSE 250 group had become the worst performing online food delivery stock in the world, with shares losing almost a quarter of their value in 2018.
Cat Rock needs support from other shareholders
“In the unlikely event of turkeys voting for Christmas and the board acquiescing to this demand, it remains to be seen just what leverage Cat Rock has,” says AJ Bell investment director Russ Mould.
“Its 1.7% stake does not carry much weight on its own and it will need to garner support from other major shareholders if it wants to force Just Eat’s hand.”
He added: “At the very least its complaint that the company has appointed executives with limited or no direct industry experience does not seem entirely unfair.
“Particularly as Just East is facing an increasingly competitive marketplace and will need forensic focus as it continues to invest in and implement its own delivery service and new technology platform.
“Interim CEO Graham Duffy is seen as a candidate for the role on a permanent basis but also fails Cat Rock’s criteria of having worked in the online food delivery space before.”
Shares were up 2% to 717.6p on Monday morning.
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