SHARES in Rentokil Initial leapt by more than 10-per cent yesterday after former Granada TV boss Sir Gerry Robinson revealed his interest in tabling a takeover offer for the pest control-to-hygiene group.
In a statement from Raphoe Management, a firm Robinson set up last month as a vehicle for investing in struggling companies, he said he intended to make a bid approach to Rentokil's board to discuss a possible offer.
The news followed weekend newspaper speculation in which the former chairman of drinks giant Allied Domecq was reported to have been approached by a small group of investors about buying a 10-per cent stake in Rentokil. Robinson was also reported to have been asked about becoming executive chairman of the business.
Raphoe said: "This announcement does not constitute a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made."
Rentokil shares ended 15.25p higher at 166.5p, valuing the company at around GBP3bn.
Investors are understood to have become increasingly frustrated at the slow progress of Rentokil's turnaround plans.
The company suffered a series of setbacks in 2004, seeing its profits fall by 25-per cent and the departure of long-serving chairman Sir Clive Thompson and chief executive James Wilde, who had only held the post for 18 months.
Since then chairman Brian McGowan and new chief executive Doug Flynn have increased investment in sales, marketing, service, IT and personnel in a bid to turn the company around.
However, in May this year, the group said profits had fallen by 16.5-per cent during the first four months of 2005 as it continued to face challenges from a difficult, price-competitive market.
Shareholders will be hoping to see some improvement in the group's fortunes when it reports interim profits on Thursday. Barclays analysts expect Rentokil to post profits of GBP153m against GBP180m a year earlier.
The company announced a 25-per cent fall in full-year bottomline profits to GBP297.8m in 2004.
Robinson has a wealth of City experience, having previously headed up food group Compass and television group Granada, as well as Allied Domecq, before embarking on a career in television with a show in which he turned around struggling businesses.
Rentokil yesterday confirmed it had yet to receive an approach from Raphoe, but added it would put any offer up against its own recovery plans.
It said: "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."
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