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Rentokil Shares: Citi Sees Trian Asking For Relisting In The US

Sam Boughedda trader
Updated 17 Jun 2024

On Wednesday last week, Rentokil shares surged more than 13% after a report from Bloomberg said Nelson Peltz's Trian Fund Management has accumulated a “significant stake” in the UK-based pest-control company.

Peltz's Trian, an activist investment firm that was recently in the headlines regarding its Disney stake and battle to get on the board, is said to have confirmed its position in Rentokil to Bloomberg, stating it contacted Rentokil to “discuss ideas and initiatives to improve shareholder value.”

The publication speculated that the topic of Rentokil's listing may be brought up. The investment firm is now one of the top 10 shareholders in Rentokil.

Peltz's firm already has a holding in another UK company, Unilever. The firm invested in Unilever around two years ago, and Peltz was appointed to the board.

Various London-listed companies are being pressured to consider dropping their London listings and heading to the US due to the US's better liquidity, access to a wider investor base, and valuation arbitrage.

Citi analysts said in a recent note that they believe Trian will ask for a relisting of Rentokil in the US “given the valuation gap with its rival Pest operator Rollins.” The firm maintained a Buy rating on the stock.

In its April 18 Q1 report, Rentokil said revenue grew 4.9% compared to the previous year, based on continued pricing momentum. 

“We have made a positive overall start to 2024. The Group has performed well and our RIGHT WAY 2 plan has delivered a stabilising performance in North America,” said Andy Ransom, CEO of Rentokil Initial. “With the key trading period for the business ahead of us, we remain confident in delivering on our guidance of 2-4% Organic Revenue growth in the region.”

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Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.