Former Granada boss Sir Gerry Robinson has laid out his plans to seize control of Sussex-based pest-control group Rentokil Initial.

Sir Gerry, who, two months ago, set up Raphoe Management as a vehicle for investing in underperforming companies, wants to take on the challenge of reviving the group.

Proposals from Raphoe include his appointment as executive chairman and the return of 35p a share to investors, worth £634 million.

Raphoe warned the Rentokil board that it would consider a takeover offer or, more likely, call a meeting of shareholders if it rejected the proposals.

Rentokil recently published details of its own strategy for halting the slide in its profits. Doug Flynn became chief executive six months ago and revealed in a recent review that Rentokil was too introspective and focused on short-term goals.

Sir Gerry, who recently stood down as chairman of Allied Domecq, wants to mastermind the turnaround of the business in a role he said he would commit to full time for a period of between three and five years. He has pledged to assess the strengths of the existing management team and implement changes where necessary.

A Raphoe spokesman said: "Raphoe hopes that the board of Rentokil will consult as widely as possible with its shareholders before formulating a response to these proposals."

It also said it reserved the right to pursue its proposals "by other means", including through an extraordinary general meeting to gain the support of shareholders or by making an offer for the company.

Sir Gerry has no shortage 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 said the substance of Raphoe's proposal was to install a new executive chairman at "significant cost".

It said that much of what Sir Gerry had presented as new initiatives, such as management appointments and a review of the company's capital structure, was already being "actively pursued" by the current management team.

Chairman Brian McGowan said: "We run this company with an open mind as to what will deliver the best value for all shareholders.

"However, Raphoe's proposals look unlikely to be in the best interests of shareholders.

"Sir Gerry Robinson wants the shareholders to give up more than £75 million of the company's equity and in return he may agree to give them up to 35p per share of their own cash."

Rentokil has 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.

Tuesday, September 13, 2005