MARKET REPORT: Rentokil shares rebound as activist Trian gains strength

A stake build by an activist investor has sparked a jump in blue-chip pest control company Rentokil Initial.

A brief statement revealed that Trian Fund Management, one of whose founding partners is American billionaire Nelson Peltz, whose daughter Nicola is married to Brooklyn Beckham, recently acquired 7.5 million shares in the British company for a total of £31 million.

The move comes after Brian Baldwin, head of research at Trian, was appointed non-executive director of Rentokil at the end of September.

Earlier that month, Rentokil shares had fallen about 20 percent after a profit warning and have only recovered slightly since then.

Trian could be looking to ramp up pressure for a significant turnaround at Rentokil, which has struggled since its major acquisition of US company Terminix in 2022. Options could include moving Rentokil’s main listing to the US and potentially selling parts of the underperforming business.

At the time of Baldwin’s appointment, Trian confirmed to the British firm that the investment vehicles it manages held approximately 57.1 million Rentokil Initial shares, representing around a 2.26 percent stake.

Shares in Rentokil Initial topped the FTSE 100 leader board, gaining 3.5 per cent, or 14p, to 412.9p.

At the end of a choppy week, the FTSE 100 index closed down 0.1 per cent, or 11.43 points, at 8,300.33, and the FTSE 250 index closed down 0.3 per cent, or 59.89 points, to 20,889.15.

On the FTSE 250, Greggs rose 1.9 per cent, or 52 pence, to 2,834 pence after analysts at investment bank RBC Capital initiated “outperform” coverage, believing the shares have been oversold.

But on the downside, Tullow Oil fell 9.9 per cent, or 2.56p, to 23.44p, having risen in the previous session after the oil and gas explorer revealed it was in preliminary talks acquisition with Kosmos Energy. Kosmos lost 7.1 per cent, or 20p, to 261p.

And Ecofin US Renewables fell 19.9 per cent, or 6.5 pence, to 26.2 pence, as the infrastructure trust proposed the sale of its investments in distributed solar assets in the United States to an affiliate of True Green Capital.

There was mixed fortune in the fund management sector. AIM-listed Impax Asset Management slumped 23.1 per cent, or 75.5p, to 252p after FTSE 250-listed wealth manager St James’s Place terminated the mandate of the company to manage its Sustainable and Responsible Equity Fund.

The fund, which represents the only business Impax has with St James’s Place, totaled £5.2bn of its assets under management at the end of November.

St James’s Place, however, gained 2 per cent, or 18p, to 914p, boosted by an upgrade to “buy” from Deutsche Bank analysts. St James’s Place returns to the FTSE 100 index later this month.

Meanwhile, FTSE 100-listed asset manager Schroders fell 0.3 per cent, or 0.8p, to 318p following a report that it is looking to sell its Indonesia business as it considers exiting some subscale markets under boss Richard Oldfield, who took over. last month.