Former Granada boss Sir Gerry Robinson has ruled out a full-scale takeover of Rentokil Initial, the East Grinstead-based rat catcher, but continues to pursue the top job.

Sir Gerry's investment vehicle Raphoe said it continued to hold discussions with Rentokil shareholders about him becoming the executive chairman of the troubled company.

With those shareholders now understood to be in talks with the company's management, Raphoe said it intended for the saga to be resolved by next Monday and as a result it no longer intended to make an offer for Rentokil.

Last month, Sir Gerry urged the board of Rentokil to accept proposals to let him mastermind the turnaround of the group, whose services range from pest control to hygiene to security.

They included his appointment as executive chairman for three to five years and a 2.5 per cent stake in the company worth about £70 million.

Sir Gerry warned at the time that if the board of Rentokil rejected the proposals, he would consider a £3 billion takeover bid or call an extraordinary general meeting in order to gain the support of shareholders for his appointment as executive chairman.

In a statement, Raphoe said Rentokil was now in talks with its shareholders over the proposals, which now linked the granting of shares to Sir Gerry with performance targets.

Raphoe said: "This being the case, Raphoe has concluded that it will not be necessary to make an offer for Rentokil and accordingly now states that it has no further intention of doing so."

The decision came as a put-up or shut-up deadline for Sir Gerry to make an offer passed.

Sir Gerry recently stood down as chairman of Allied Domecq and set up Raphoe to invest in under-achieving companies.

Profits at Rentokil fell 19.8 per cent in the first half of the year to £135.4 million after it continued to suffer from tough trading conditions. Last month, the company said it hoped to raise more than £300 million from the sale of its conference centres as current executive chairman Doug Flynn and chairman Brian McGowan fought interest from Sir Gerry.

Investors in Rentokil are understood to be becoming frustrated at the amount of time taken to turn the business around. Last year the group parted company with long-time chairman Sir Clive Thompson after a boardroom coup.

Since than Flynn and McGowan have increased investments in sales, marketing, IT and personnel and are committed to moving the corportate head office out of a 700-year-old mansion near East Grinstead to London.

Tuesday, October 18, 2005