Just Eat merger probe 'shocking and unwarranted'

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A key investor has reacted angrily to news that the merger between online food ordering firms Just Eat and Takeaway.com faces regulatory hurdles.

Cat Rock Capital, which owns 3% of Just Eat's shares and 6% of Takeaway's, said the last-minute inquiry was "shocking and clearly unwarranted".

The Competition and Markets Authority said on Thursday it was examining the deal, first mooted in August last year.

Takeaway has said it will delay the takeover timetable by a week.

Dutch giant Takeaway's £5.9bn all-share offer for UK-listed Just Eat was unsuccessfully challenged by tech investment firm Prosus, but has now been accepted by 90% of Just Eat shareholders.

If the deal is approved by the CMA, it will create one of the world's largest meal delivery companies.

'False equivalence'

"It is shocking that the CMA would investigate the Just Eat merger with Takeaway.com," said Alex Captain, founder and managing partner of Cat Rock Capital.

"Takeaway.com has no UK operations, exited its minor business there over three years ago and has stated that it had no intention to enter the UK market before the Just Eat merger."

Mr Captain said the CMA investigation seemed to draw "a false equivalence" between the Just Eat deal and Amazon's investment in Deliveroo, which it is also investigating.

"The CMA has had an opportunity to review the Just Eat and Takeaway.com merger for almost six months since it was first announced in early August 2019.

"We hope that any review that starts today, when the combined company's shares are meant to begin trading, would be conducted quickly and fairly."

The deal envisages a merged company led by Takeaway chief executive Jitse Groen, with its headquarters in Amsterdam and a listing in London.

Its businesses process 360 million annual orders worth €7.3bn (£6.6bn).

'No notification'

The combined firms have 23 subsidiaries, mostly in Europe but also in Canada, Australia and Latin America.

A CMA spokesperson said its job was to protect the interests of UK consumers.

"Just Eat is one of the main players in the UK market. Takeaway.com is a large and well-resourced player with significant capabilities and a considerable interest in online food platforms globally.

"Information we now have available to us suggests that Takeaway.com could have been well-placed to enter the UK market if the merger hadn't happened and compete with Just Eat - so it's important we open a formal investigation to find out more about this.

"Merging businesses can always choose to formally notify a merger to the CMA if they want to avoid the risk that the deal could be called in for investigation at a later stage - and Takeaway.com chose not to do this," the CMA said.

Just Eat was founded by a group of five Danish entrepreneurs in 2000 and launched a year later. It employs 3,600 staff globally.

As well as the Just Eat brand in Europe, it trades as Skip The Dishes in Canada, iFood in Mexico and Brazil, and Menulog in Australia and New Zealand.

Just Eat is listed on the London Stock Exchange and is a member of the FTSE 100 share index.

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