BET steps up Rentokil battle
Monday 11 March 1996
BET, the industrial services group, yesterday stepped up the battle against Rentokil's pounds 1.9bn bid with an attack on its rival's relationship with majority shareholder Sophus Berendsen.
In its first defence document, posted last night, BET forecast a 5.1p dividend, up 27.5 per cent on the previous year. A profit forecast for the year to 30 March will follow. The document also highlighted what it called a potential conflict of interest between Rentokil and Berendsen, the Danish company which owns 52-per cent of Rentokil.
Rentokil has said it plans to develop BET's Initial cleaning division, but yesterday's document claims this will bring it into direct competition with Berendsen's own operations.
"Would Sophus Berendsen continue to be represented on the Rentokil board if Rentokil were to acquire BET?" the document asks. "How could Sophus Berendsen participate in discussions about textile rental?"
BET also claims Berendsen, whose Rentokil stake would be diluted to about 35 per cent if the takeover succeeds, backs the bid because it wants the flexibility to reduce its stake further.
There was confusion on Friday about Berendsen's long-term intention after reports in Denmark that it planned to sell a further 10 per cent in Rentokil. Rentokil said that Berendsen's chief executive, Hans Werdelin, had been misquoted.
The document sought to spell out how BET had been turned around under its chief executive, John Clark. It said earnings had risen by more than 25 percent in the 18 months to 30 September 1995 and had recently grown substantially faster than those of Rentokil. This clear strategy contrasted sharply with the blurred focus of Rentokil's diversification efforts, it said.
BET has been restructured after a 1980s spending spree left it with high debts and a sprawling collection of interests. The company said it had been transformed into a group which was debt-free, tightly controlled and strategically focused.
Sir Christopher Harding, BET chairman, said directors had no hesitation in recommending rejection of the offer.
Rentokil's chief executive, Clive Thompson, said: "We are studying the BET document, in the same way as BET shareholders, in the search for new information. So far this is proving difficult."
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