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Shares in Rentokil surged more than 15 per cent on Wednesday after it emerged that activist investor Nelson Peltz’s Trian Partners had taken a stake in the world’s largest pest control company.
The shares were the biggest gainers on the FTSE 100, driving Rentokil’s market capitalisation to £11.9bn.
The London-listed group has struggled in recent months with a slowdown in demand in the US, which accounts for more than half its sales following its $6.7bn acquisition of Terminix in 2021.
Trian told Bloomberg that it had a “significant position” in Rentokil and had “reached out to Rentokil to discuss ideas and initiatives to improve
shareholder value”.
Trian did not immediately respond to a request for comment. Rentokil declined to comment.
Despite the jump in its share price early on Wednesday, the stock remains down 27 per cent over the past 12 months.
Peltz is best known for his turnaround campaigns at big consumer goods
companies such as Mondelez, Heinz and Procter & Gamble. Trian’s playbook is to buy a stake in a listed company and agitate for
improvements, often by seeking a board seat and sometimes pushing for
divisions to be broken up or sold.
In Trian’s almost 20 years in business it has taken on more than 30
engagements — ranging from behind-the-scenes dialogue to all-out proxy
war — at some of the world’s largest consumer, financial and
industrial companies.
Most recently, Trian lost a proxy fight at US entertainment
group Walt Disney, where Peltz had waged an expensive campaign for
board seats.
UK investment platform AJ Bell suggested that Trian could call on Rentokil to shift its listing to New York, echoing a strategy it adopted when it took a stake in UK plumbing and heating equipment supplier Ferguson.
The multibillion-dollar pest control industry expanded strongly during the pandemic because of increased concerns about viruses and diseases stemming from Covid-19. More recently, customers have been worried about the rise of bedbug infestations, particularly in France and the UK.
Revenue from the group’s North America operations was £3.3bn in 2023, accounting for more than half of its global sales of £5.3bn. Rentokil’s interim results are due on July 25.
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