Just Eat has been urged to initiate merger talks with industry peers by top two shareholder, Cat Rock in an open letter to the board.

Cat Rock expressed “deep concern” regarding the board’s recent appointment of executives who lack online food delivery experience to critical roles at the company, which it said repeated the mistake the board made by appointing Peter Plumb as chief executive.

Cat Rock argues that a merger with a well-run industry peer would be a far better outcome for shareholders than relying on the board to choose a new chief executive. It said a merger “could deliver world-class management, delivery capabilities, a premium, and, critically, continued equity participation in any future value creation.”

Alex Captain, founder and managing partner of Cat Rock Capital Management, said: “Just Eat is a high-quality business with fantastic growth prospects. As long-term shareholders with significant experience in this sector, we are keenly focused on ensuring that the board pursues the best path for the company and its shareholders.

“The board’s experiment of appointing an industry outsider like Mr Plumb to the CEO role failed miserably and destroyed shareholder value. Now Just Eat needs a world-class management team with online food delivery experience and proven delivery capabilities. A merger is an obvious path for securing these advantages for the Company.

“We believe that there would be significant strategic interest from other industry participants and therefore urge the Board to swiftly and seriously engage in good-faith merger discussions to create substantial value for all Just Eat shareholders.”