Activist investors call for shake-up at Rentokil after share price tumble

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Retail Reporter

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Rentokil shares have dropped recently as it has struggled to integrate a US acquisition
Rentokil shares have dropped recently as it has struggled to integrate a US acquisition

Nelson Peltz’s activist hedge fund Trian Partners is among the shareholders reportedly calling for a shake-up at pest control firm Rentokil after a severe drop in its share price.

Trian Partners, which has built a fearsome reputation for waging activist campaigns on global boardrooms, has held urgent meetings with Rentokil’s chief executive and chairman to calm fears over the future of the company, according to The Sunday Times.

Shareholders have raised concerns about the company’s ability to integrate a US business it bought in 2022 and have reportedly called for the company’s chief financial officer and US head to step aside.

Last week, Rentokil saw its share price fall by 19 per cent after a string of dismal stock market announcements. Shares have fallen by 37 per cent so far this year.

As well as the removal of US head Brad Paulsen, who has only held his post since December last year, shareholders have lobbied for chief financial officer Stuart Ingall-Tombs to step aside after a failure to meet targets, The Sunday Times reported.

Rentokil has been struggling financially since acquired American rival Terminix in 2022 in a $6.7bn (£5.11bn) deal. It issued a profit warning in October as demand in North America faltered.

Its performance in the US has been exacerbated by the strong position of rival Rollins, whose share price has risen by over 16 per cent in the year to date.

However in its July it flagged “stronger” sales in its North American pest business, where it has pumped in around $50m (£38.8m) in investment to drive growth.

In a statement published to the London Stock Exchange on 4 September, the company said: “Our immediate focus is on the Right Way 2 plan to improve revenue growth, through increased lead flow, sales conversion and customer retention.

“We are taking decisive action to mitigate the cost over-runs as we exit the peak season, managing inventory more effectively, managing technician workload and overtime, and will right-size labour resources for the volume opportunity.

“We continue to believe in the fundamental strength of the North American business.”

Morning Wire has contacted Rentokil for comment