Sir Gerry Robinson was on Friday forced to give up his attempt to become executive chairman of Rentokil and issued an apology to the company's employees after talks with investors failed. Sir Gerry said: “I am sorry that we have not found the right way forward. This was a genuine attempt to make a change with the existing shareholders staying involved. This has been an unsettling time for employees of Rentokil Initial and I apologise for that.”
The former chairman of Granada and star of the TV series I'll Show Them Who's Boss approached the support services company for takeover talks in August but did not explain how he would turn Rentokil round or what performance targets he would use.
David Greenall, analyst at Dresdner Kleinwort Wasserstein, said: “Sir Gerry's credibility is at an all time low. He might as well go back to TV.”
Sir Gerry's turnround plan for Rentokil included returning up to £600m to shareholders through a special dividend and gearing up the company.
He wanted to install himself as chairman of Rentokil Initial in return for shares worth £76m at current prices, payable to his bid vehicle Raphoe Management, of which he owns 72 per cent. A successful bid would have netted him about £55m.
Doug Flynn, chief executive of Rentokil, said: “This has been an expensive exercise that could cost Rentokil up to the thick end of £20m. A lot of work has been done and we have had to prepare all the defence documents. If we could make Sir Gerry pay for all this, believe me we would.”
But Mr Greenall said he thought £20m was a ridiculous number plucked from “cloud-cuckoo-land”.
“Is this just an excuse to put more costs through the business?” he asked. Last week, Sir Gerry shied away from launching a full bid for Rentokil, deeming it “unnecessary”.
He hoped instead that disaffected shareholders would install him as the company's executive chairman.
The biggest investor in Rentokil, Franklin Templeton, which owns about 14.7 per cent, was the only shareholder to come out publicly in support of Sir Gerry.
Richard Lacaille, European chief investment officer at State Street Global Investors and 10th largest shareholder with 2.6 per cent, said: “I should bloody well hope he has apologised. You can't install somebody when he has nothing to say.
“Sir Gerry was talking up the fact that he was going round shareholders but he never came to see us.”
Mark Shepperd, analyst at UBS, said: “Sir Gerry seriously misjudged the mood of investors. He needs to choose his targets more carefully. Investors generally don't like this kind of approach.”
Other analysts wondered, with amusement, whether Sir Gerry would turn his focus towards Compass, the caterer, which on Friday suspended a senior executive following a United Nations investigation.
Shares in Rentokil fell 0.2 per cent to 155p
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