The US private equity group, which owns 3% of Just Eat, said in a letter to shareholders that it believed the all-share tie-up will create a company worth “over 1,200p per share by the end of 2020”, around 60% upside to the FTSE 100 firm’s current share price.
“A Just Eat merger with Takeaway.com would create a formidable global leader with significant growth prospects and world-class management”, said Cat Rock’s founder Alex Captain.
Just Eat’s management are trying to shore up support for its merger with Takeaway.com after South African e-commerce firm Prosus gate-crashed the process in October with a £4.8bn cash offer, or 731p per share, compared to the implied value of 609p for Takeaway.com’s bid.
Cat Rock said the hostile offer from Prosus “significantly undervalues Just Eat and shares none of the future potential of the business with Just Eat shareholders” and urged investors to reject the bid in line with advice from Just Eat’s management, who have also unanimously backed the Takeway.com merger.
In mid-afternoon trading on Tuesday, Just Eat shares were flat at 758p, higher than both current bids suggesting that investors believe a higher offer may be incoming.