- Grubhub said it faces 14 lawsuits alleging it misled investors about its Just Eat Takeaway merger.
- The lawsuits claim Grubhub withheld key financial protections and executives’ conflicts of interest.
- Investors want the court to invalidate the merger until Grubhub secures a better deal for them.
- See more stories on Insider’s business page.
Grubhub disclosed in a regulatory filing Thursday that it’s facing 14 lawsuits from investors who say the company misled them about its plans to be acquired by Dutch food delivery giant Just Eat Takeaway.
The investors alleged that Grubhub executives and board members failed to disclose key financial details and massive payouts that they stood to receive as part of the merger, and that they failed to secure the highest possible price for Grubhub’s public shareholders, harming them financially as a result.
Frank Ferreiro, the lead plaintiff in the case, said in a lawsuit filed in New York last month that when Grubhub publicly announced the proposed merger, it withheld underlying financial data it had used to make assumptions about the companies’ future performance, as well as well as “golden parachutes,” job offers, and other lucrative perks guaranteed to Grubhub executives and directors.
Ferreiro’s lawsuit alleged that investors like himself – who would get roughly 0.67 share of Just Eat stock for each of their Grubhub shares regardless of either company’s stock price when the merger closes – lack the information to determine whether they’re getting a raw deal.
“Grubhub insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders,” the lawsuit stated.
Ferrerio also said that GrubHub didn’t try hard enough to get the best deal for public investors.
His lawsuit asks the court to invalidate the proposed merger agreement and force Grubhub to seek the “highest possible price” for any sale.