BET, the business services group, has gone on the offensive in its battle against the pounds 1.8bn hostile takeover bid by Rentokil. The company has written to its shareholders detailing the recent improvement in the group's performance while recommending they take no action in relation to any Rentokil circulars.
Rentokil's offer document is expected to be released today and will set the clock ticking on the 60-day takeover timetable.
BET refutes Rentokil's criticisms of the company, claiming it uses a period before new management was brought in under John Clark in April 1991. These figures show that BET's sales, profits and dividends all declined between then and 1995.
BET's circular, dated 24 February, splits the period into two parts. It says that between 1991-94, net debts of pounds 712m were turned into a net cash position of pounds 33m. Meanwhile the number of profit centres was reduced from 160 to 55.
Between 1994-95, it says that BET's performance has been steadily improving with operating profits up 20 per cent, earnings per share 28 per cent and dividends 33 per cent.
It adds that the growth continued in the first half to September last year with turnover up by 10 per cent. It says the company has benfited from expanding into higher-margin businesses.
A spokesman for BET said yesterday: "The question is, which is the best management team to take BET forward? We think John Clark and his team have the momentum to move ahead. Rentokil is moving in the other direction."
Rentokil's chief executive, Clive Thompson, has been critical of the BET management saying its approach has lacked focus. He said the strategy for BET would be to concentrate on the group's cleaning, security, textile services and distribution businesses. Divisions such as plant services, conferences and resort management units may be sold.
The publication of Rentokil's offer document is expected to spark a fresh round of aggressive posturing by the two companies which have already engaged in a war of words.
BET rejected claims by Rentokil that there was significant scope for cost savings and dismissed its offer as "inadequate". Mr Thompson criticised Mr Clark of failing to understand the potential synergies of a takeover.
Rentokil has lambasted the performance of BET management. It says that the company's trading since its pounds 205m rights issue in 1992 has been unimpressive. Net revenue from continued operations fell by 1 per cent, it said. Operating margins increased by less than 1 per cent.
It also criticised BET for returning to the acqusition trail before restoring its operating margins to previous levels.
For its part, BET has questioned Rentokil's logic of first seeking an agreed deal and then turning hostile.Reuse content