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FTSE reshuffle: Just Eat set to be ejected after ruling it is Dutch not British

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·3 min read
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CARDIFF, WALES - MAY 1: A Just Eat worker on May 1, 2021 in Cardiff, Wales. (Photo by Matthew Horwood/Getty Images)
The FTSE Russell, the global index provider, ruled last month that Just Eat was a Dutch firm rather than a British company. Photo: Matthew Horwood/Getty

Takeaway firm Just Eat (JET.L) is set to be booted from the FTSE 100 (^FTSE) after market close on Wednesday as the latest reshuffle of the UK’s stock market indices takes place.

It comes as the FTSE Russell, the global index provider, ruled last month that Just Eat was a Dutch firm rather than a British company.

This means that it would be ineligible to be included in the FTSE UK Index Series under the nationality change, paving the way for veterinary drugs company Dechra Pharmaceuticals (DPH.L) to potentially take its place.

Just Eat, which recently announced that it was creating 1,500 jobs in Sunderland, has struggled to shore up its finances over recent months despite benefiting from strong demand among UK consumers for takeaways amid COVID-19 lockdowns.

Since it completed the takeover of US rival Grubhub earlier this year, the company has also maintained listings on exchanges in the US and Amsterdam.

Meanwhile, British broadcaster ITV (ITV.L) could also be dumped from London’s benchmark, despite a boost from the Euros ad spend. The company was previously relegated to mid-cap index the FTSE 250 in September 2020 and then promoted back to the FTSE 100 in June.

Read more: UK competition watchdog clears National Grid acquisition of WPD

Weir Group (WEIR.L) is also floating around the bottom of the index after suffering a dip over the last quarter. The engineer was also only bumped up to the FTSE 100 in March.

On the other hand Morrisons (MRW.L) and Meggitt (MGGT.L), who have both seen their share prices soar due to takeover bids, are in pole position to be promoted.

“Morrisons have been the subject of a bidding war which has seen its price rise by 62% over the last three months, with private equity firm Clayton, Dubilier & Rice in pole position to win the race for Morrisons and therefore see the shares delisted,” Richard Hunter, head of markets at interactive investor, said last week.

He added: “Similarly, aerospace company Meggitt shares have risen by 71% over the last three months after approaches from both Parker-Hannifin and TransDigm Group. Whichever company ends up with control of Meggitt would result in the shares being removed from the premier index.”

Morrisons, which was founded in Bradford in 1899, has been at the heart of a bidding war between a Fortress-led consortium and Clayton, Dubilier and Rice, while two separate US aerospace companies, TransDigm and Parker Hannifin, are competing to acquire Meggitt.

Potential joiners have to number in the top 90 to ensure a spot in the FTSE 100, and existing constituents have to drop outside the top 110 to guarantee demotion.

Read more: Supply issues in UK manufacturing push up prices

Elsewhere, Cambridge-based cybersecurity firm Darktrace (DARK.L) is set to join the FTSE 250 just four months after listing in London.

Shares rocketed on their London Stock Exchange debut. The company’s initial public offering (IPO) valued it at £1.7bn ($2.3bn), which equated to 250p a share. However, within minutes of conditional trading, shares jumped to 350.4p, a rise of 38%.

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