Sir Gerry Robinson’s Raphoe Management approaches Rentokil

Sir Gerry Robinson’s Raphoe Management approaches Rentokil

	Published : Tue, 23 Aug 2005 09:05 By : Phil Bateman Print this Story

LONDON - Struggling pest control-to-hygiene group Rentokil Initial is reportedly in urgent talks with Sir Gerry Robinson to take over the chairman's post in the company. According to reports, Sir
Gerry has been approached by key shareholders to bail them out of the mess.

Sir Gerry who was formerly the top man at Granada has floated Raphoe Management, a company that aims to invest in ailing UK companies that have fallen into bad times due to inappropriate management or inefficient capital structures. Sir Gerry Robinson, who recently quit as the chairman of Allied Domecq after the group was acquired by Pernod Ricard, has made an offer to Rentokil via the Raphoe Management. This news has resulted in the company's shares jumping by 11.1 percent at 168 pence during lunchtime trading. Earlier the shares had hit a high of 173 pence.

At 168 pence, Rentokil is valued at £3.1 billion. "Having taken soundings from certain shareholders of Rentokil Initial Plc, Raphoe intends to approach the board of Rentokil to discuss the possibility of making an offer for Rentokil and to seek discussions with the trustees of the Rentokil pension funds," the company said in a statement.

The company is struggling to haul itself out of a quagmire that is a result of stiff competition and spending cuts by customers due to the tough conditions prevailing in the UK economy. Last year, Rentokil fired its chairman and chief executive and brought in fresh blood in the form of Brian McGowan, as the chairman, and Doug Flynn, as the chief executive. The pair has combined quite nicely and lately the group's investments in sales, marketing, service, IT and personnel have received a fair share of attention. However, Rentokil admitted that the first four months of the year were bad ones with a 16.5 percent loss. The group is to unveil interim profits on Thursday and shareholders would be keeping their fingers crossed. Responding to Raphoe's offer, Rentokil issued a statement saying, "The board will consider any proposal that Raphoe makes in the context of the value available to shareholders from the plans that the new executive team has for the company."