Rentokil details cost of takeover fight
Troubled Rentokil Initial said its recovery was on course today as it revealed costs of £10m (€14.7m) to fight off a takeover approach from Gerry Robinson.
The pest control and hygiene firm reported a 5.3% increase in sales for the third quarter as the restructuring of the company continued.
But pre-tax profits for the three months to September 30 were down 21% as Rentokil spent £10m (€14.7m) fending off interest from Robinson’s investment company Raphoe.
Robinson declared his interest in Rentokil in August, and was rumoured to be preparing a full-scale takeover bid worth around £3bn (€4.4bn).
But last month he ruled out a bid and instead entered talks with Rentokil shareholders, pinning hopes on them overthrowing the company’s current management and appointing him executive chairman.
Rentokil bosses opposed the proposals, which would have seen Robinson take a 2.5% stake in the company worth up £70m (€103m) depending on performance, and talks broke down.
Today Rentokil said that the amount it cost to fight off Sir Gerry would have doubled to £20m (€29.4m) had a bid materialised.
Chief executive Doug Flynn said: “The company has incurred considerable expense in relation to the unwelcome approach by Raphoe.
“We were put into an ofer period and then subsequently threatened with an EGM. As is necessary in such circumstances, the company engaged a full team of professional advisors, inevitably at some cost.
“The board was unanimously of the view that the proposals were not in the best interests of shareholders and had prepared a vigorous defence.”
