Just Eat Takeaway, the prominent food delivery giant, is set to delist its shares from the London Stock Exchange (LSE), marking another significant event for the UK financial market. The decision to withdraw its presence from London's bourse by December 27 has raised eyebrows amid growing concerns about the diminishing attractiveness of the UK's capital markets to tech firms.
The Netherlands-based company announced its intentions earlier this week, stating the primary reasons for this move were to streamline operations and reduce the "administrative burden, complexity, and costs" associated with maintaining its listing on the LSE. Just Eat Takeaway's management emphasized low liquidity and trading volumes as pivotal factors contributing to this decision. The last trading day for its shares on the LSE will be December 24, effectively making Amsterdam its only trading venue going forward.
Over the last decade, the London Stock Exchange has experienced declines, with about 25% fewer companies listed compared to earlier times. This trend raises alarms for the UK and European private market, as shrinking stock exchanges hinder opportunities for initial public offerings (IPOs) and make it difficult for private equity and venture capital investors to realize returns through successful exits.
The delisting of Just Eat is particularly noteworthy following its recent decision to sell its U.S. subsidiary, Grubhub, to New York-based startup Wonder for around $650 million—a massive markdown from the $7.3 billion price tag when Just Eat acquired Grubhub back in 2021. This sale, part of broader efforts by Just Eat to restructure and reduce operational costs, has sparked discussions about the company's long-term strategy and the viability of its previous acquisitions.
Just Eat originally entered the UK public market back in 2014, receiving significant backing from venture capital firms such as Index Ventures and Vitruvian Partners. The company solidified its footing with its merger with the Dutch company Takeaway.com in 2019, leading to the creation of one of the biggest players on the European food delivery scene.
The broader implications of Just Eat's exit from the LSE highlight the challenges the exchange faces. Listing venues like Euronext Amsterdam could be perceived as more favorable due to lower administrative expenses and administrative responsibilities when contrasted with the increasingly cumbersome compliance frameworks at the LSE. This trend is not isolated; it follows notable exits from the LSE by other companies such as Dublin-based gaming giant Flutter Entertainment, which shifted to the New York Stock Exchange, and German travel company Tui, which decided to consolidate its listings solely within Germany.
Critics of Just Eat's time on the LSE often point to its disastrous attempt to expand quickly through acquisitions, particularly its ill-timed buyout of Grubhub during the pandemic’s peak takeaway boom. Some industry commentators argue this acquisition reflected the management's overreaching ambitions, believing the Covid boom would sustain high growth indefinitely. The reality proved different as the company now finds itself restructuring under financial pressures and dwindling stock performance.
Co-founder and CEO Jitse Groen's leadership has come under scrutiny following the acquisition. The sheer drop-off of Just Eat's stock price—down nearly 90% since the Grubhub deal—has caused disillusionment among shareholders. Investors were initially supportive of the Grubhub merger, with broad shareholder approval swaying the board's decision to proceed with what was viewed as growth-oriented strategic maneuvering. Now, shareholders have to accept relegation to Euronext’s trading events.
Despite these challenges, Just Eat has made clear its commitment to the UK market, which remains one of its largest delivery sectors. The absence of the company from the LSE is not necessarily indicative of its potential growth or performance within the food delivery market; rather, it reflects administrative realities and the shifting strategic focus led by pressures to optimize costs.
The steady decline of listings on the LSE brings to light important questions about the future attractiveness and vibrancy of the UK equity markets. Experts are urging for more proactive measures to rejuvenate interests among high-growth tech companies, as loss of flagship corporations like Just Eat sends ripples of concern throughout both private and public sectors. Adequate financing options and favorable regulatory conditions are becoming ever more important for the survival and appeal of the London Stock Exchange as competition from other venues intensifies.
Looking beyond just the numbers, there's also the narrative of talent, capital, and reputation at stake. If prominent firms feel compelled to shift their focus elsewhere, it could trigger what analysts refer to as 'flight risk'—a tendency among skilled professionals and funds to gravitate toward more favorable environments. The London Stock Exchange's status as one of the foremost financial hubs could increasingly be challenged if these trends continue.
Just Eat's decision to delist from the London Stock Exchange, driven by practical administrative needs rather than merely financial distress, is indicative of broader operational realities faced by companies trying to navigate complex market conditions. Stakeholders and analysts will be monitoring closely as the food delivery giant pivots its strategy and what this means for the broader market dynamics.
