New Rentokil offer lifts bid costs to pounds 74m

Rentokil yesterday looked set to secure victory in its bid for rival business services BET after raising its offer to pounds 2.1bn. But it revealed that the increased terms would raise the advisory and other costs of its bid by pounds 17m to pounds 74m.

The figure is before any payoffs for directors, with John Clark, BET's chief executive expected to pick up around pounds 5.6m if he is forced out following a successful takeover.

The news came as Amec, which successfully fended off an unwanted bid from the Norwegian group Kvaerner, announced that its pounds 4.1m defence costs had cut 1995 profits by over a fifth.

Clive Thompson, Rentokil chief executive, said around pounds 30m of the pounds 57m cost of the original bid related to underwriting fees. The new offer would add around pounds 17m to the total, part of which would be success-related, he said.

BET immediately rejected the increased offer, which was widely expected. News of the higher terms sent the bidder's share price down 13p to 350p yesterday, while BET added 0.75p to 208.25p. Rentokil is offering nine new shares and pounds 10 in cash for every 20 BET shares and promising to pay 4p a share in dividends to BET shareholders. The share terms remain the same under the new offer, but the cash element is raised from pounds 8 to pounds 10.80 or 14p a share. It values BET shares at 211.5p after the fall in the Rentokil price yesterday, well clear of a raised cash alternative of 202.5p, up from 179.5p before.

Announcing the new offer, Mr Thompson renewed hostilities in what has already been an acrimonious bid saying that Rentokil would be complaining to the Takeover Panel about BET's "misleading" use of the two companies' share prices in rejecting the latest offer.

He also reopened his attack on the management of BET since Mr Clark took over in April 1991. He said Mr Clark was now in the fifth year of a three year turnaround programme. "The management team which did a sound job in turning round this business has failed, it's failed and it's failed again in its attempts to grow the business."

Mr Thompson said Rentokil would reap cost savings from merging businesses and closing the BET head office. The 124 people in that area cost pounds 24.6m in 1994-95 and some of those costs could be saved, but he refused to give any precise figures, saying he did not want to fall into the trap created for itself by Granada when it said during its bid for Forte that it would reap pounds 100m savings from merging the two businesses.

He said any redundancies would come from managerial and administrative personnel and "we are talking about tens or hundreds rather than thousands world-wide." There would be immediate cost savings to be made from merging similar businesses such as cleaning, facilities management, personnel and security in the UK.

There would also be longer-portunities to develop BET's Initial brand name alongside the existing Rentokil brand. They would keep "an open mind" on what to do with peripheral businesses, including plant services, conference centres and resort management.

But BET said it had "no hesitation" in rejecting the bid after a board meeting yesterday. It claimed that much of the increased offer was illusory, with some 30 per cent of the increase being paid for with money already promised to BET shareholders through its final dividend for this year.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created