BET steps up Rentokil battle

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The Independent Online
BET sought to regain the initiative in its takeover fight with the rival business services group Rentokil yesterday when it staged a mass presentation to institutional investors.

With city analysts expecting that a small rise in Rentokil's current pounds 1.9bn offer might win the battle, BET published new figures which it said underlined the growing strength of the business.

BET said that about 30 of the 50 largest shareholders in the company sent representatives to the meeting, where the chief executive, John Clark, outlined prospects for the key operations in the group.

Six operations - distribution, security, training, textile, leisure and plant hire - would produce turnover up 14 per cent this year, with operating margins rising to 11.5 per cent.

"The true potential of BET lies within these six key product groups. They are the bedrock of the future of BET, and we are confident that they will deliver growth well into the next decade," the chairman, Sir Christopher Harding, said .

But Rentokil seized on BET's failure to mention its cleaning and personnel services activities, which it claimed accounted for one-third of turnover.

Clive Thompson, Rentokil's chief executive, said: "Yet again BET shareholders must have been disappointed by what they saw and heard today. Their board remains unwilling to address the real performance of the majority of BET businesses."

The comments came as stockbrokers NatWest Securities issued a report that BET appeared to have little chance of escaping Rentokil's clutches. Analyst Paul Morland said: "We conclude that Rentokil's initial offer is generous and BET shareholders should not assume that it will be raised. If the offer is raised, it is unlikely to be by very much."

He believes that Rentokil has little scope to raise the offer because a takeover would enhance earnings by 3 per cent if there were no disposals.

"If Rentokil were to dispose of plant services and Style conference management, we estimate that the deal will be earnings neutral at the current offer price," he said.

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