Former Granada boss Sir Gerry Robinson has revealed his interest in tabling a takeover offer for Sussex-based pest control group Rentokil Initial.

Sir Gerry, who last month set up Raphoe Management as a vehicle for investing in under-performing companies, said he intended to approach the Rentokil board to discuss the possibility of making an offer.

It comes after a weekend of speculation in which the former chairman of drinks group Allied Domecq was said to have been approached by a small group of investors about Raphoe buying a ten per cent stake in Rentokil and Sir Gerry becoming executive chairman.

A statement from Raphoe confirmed it had taken soundings from certain shareholders of Rentokil Initial and that it intended to approach the board about an offer for the company.

Rentokil shares jumped 13 per cent to 171p, valuing the company at more than £3 billion.

Investors in Rentokil are understood to be becoming frustrated at the time taken to turn the business around.

The group's profits fell by 25 per cent during 2004, a year which also saw the departure of long-time 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.

They have also committed to moving the group's corporate head office out of Felcourt - a 700-year-old mansion near East Grinstead - to a "simple office in central London". Hundreds of staff will be relocated to new premises elsewhere in West Sussex.

But 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.

However, the group, which has three main divisions operating in pest control, hygiene and security, has already warned that there will be no quick fix.

Tuesday, August 23, 2005