Rentokil set to reject break-up
The break-up of troubled Rentokil Initial is to be rejected in a review of the services group due to be unveiled next week, it was reported today.
Rentokil, which has suffered a turbulent period since May with the departure of its chairman and chief executive and a warning on profits, is likely to hold on to its parcel delivery and conference businesses.
Investors had expected the operations – worth an estimated £600m (€889.3m) – to be sold to enable Rentokil to focus on contract cleaning and pest control work.
Shares have climbed 15% since hitting a low two weeks ago, but the report in the Financial Times disappointed the market and the stock slipped 4% today.
It is understood that chairman Brian McGowan will keep the door open to the sale of the parcel delivery and conference arms if future offers are attractive.
The report said Rentokil had received a number of approaches for the two businesses, but the decision to keep the group intact was likely to spur speculation that it has been unable to obtain high enough prices.
Mr McGowan announced the root-and-branch review after taking the helm from Sir Clive Thompson – known as Mr 20% for his earnings record while chief executive.
