Response to Raphoe proposal
Rentokil Initial PLC
08 September 2005
Response to Raphoe proposal
The Board of Rentokil Initial plc ('Rentokil' or the 'Company') notes the
announcement made earlier today by Raphoe Management Limited ('Raphoe').
The Board notes that:
- The substance of Raphoe's proposal seems simply to install a new Executive
Chairman at significant cost - in excess of £75 million at last night's
closing share price, plus executive remuneration, plus a share of any
capital return
- Of this, Sir Gerry Robinson will receive some £55 million, while Raphoe
proposes that the Company should pay Europa Partners approximately
£20 million
- Executive rewards of that scale and without any performance hurdles - as
Raphoe proposes - do not meet the corporate governance and remuneration
standards supported by the Board of Rentokil and best practice
- It is hard to see why Sir Gerry Robinson should receive a significant stake
in Rentokil without putting any money into the Company himself and with
only a three year time horizon
- Raphoe suggests a review of financing structure - but the Company's new
Finance Director already has one under way
- Raphoe's proposal contains no suggestion as to what operational plans
Sir Gerry Robinson thinks he can implement that the current management
cannot
- In proposing his appointment as Executive Chairman, Sir Gerry Robinson
disregards that Rentokil already has a new Chief Executive and a new Finance
Director who joined a group with a board structure that follows best
governance practice
- Much of what Raphoe presents as new initiatives from Sir Gerry Robinson
- such as management appointments and capital structure review - is already
being actively pursued by the current management team.
Brian McGowan, Chairman of Rentokil, said 'We run this Company with an open mind
as to what will deliver the best value for all shareholders. We are aware that
Franklin Templeton has been in discussions with Sir Gerry Robinson for some
months. However, based on the announcement today, 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'.
Enquiries:
John Sunnucks, Gill Ackers; Brunswick Group LLP: 020 7404 5959
The Directors of Rentokil accept responsibility for the contents of this
announcement. To the best of their knowledge and belief, having taken all
reasonable care to ensure that such is the case, the information contained in
this announcement is in accordance with the facts and does not omit anything
likely to affect the import of such information.
This information is provided by RNS
The company news service from the London Stock Exchange
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