Rentokil to sound out improved offer

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The Independent Online
Rentokil, the business services group, is planning to meet key institutional shareholders this week to discuss how high it must raise its offer for rival BET.

Clive Thompson, Rentokil's chief executive, is believed to feel that another 10p a share might secure victory, though some investors are preparing to tell him that BET is worth an extra 15p.

The meetings come as BET was planning more complaints to the Takeover Panel today over claims that the Rentokil camp was behind market rumours that big institutions are pressing for an agreed deal.

BET, which complained to the Panel last week about the rumours, said it would make further representations because they were continuing to be spread.

BET has already complained to the Panel about a stockbrokers' note from NatWest Securities, which did not say the firm was a joint underwriter to the Rentokil offer.

Legal & General and M&G, both large shareholders in BET, have denied suggestions they were pressing the company to accept a recommended takeover. BET has twice rejected Rentokil's offer of talks.

Rentokil has until Friday to decide whether to raise its current pounds 1.9bn offer, though the company is said to now accept its first offer is not sufficient. "Soundings will be taken to see how much higher we have to go," a Rentokil source said.

The current offer is nine new Rentokil shares and 800p cash for every 20 BET shares. At last week's closing share prices, the offer values BET at 204.25p a share. There is a cash alternative of 197.5p.

Two large institutional shareholders told the Independent that BET was worth a minimum of 10p more. One said: "BET has been better at getting its message across. An offer worth 220p a share could probably be called a knock-out blow."

BET, too, is planning to lobby large shareholders, and hopes to get to see about 30 institutions this week, after seeing about 10 last week.

Meanwhile, Rentokil's annual report, published this weekend, showed that Mr Thompson's salary rose pounds 115,000, from pounds 742,000 to pounds 857,000. The remuneration included a pounds 320,000 performance-related bonus.

Any attempt by BET to make capital over the pay rise were expected to be met with reminders from Rentokil that BET's chief executive, John Clark, stands to make up to pounds 5m from turning BET around. The annual report also included promises by Rentokil to appoint two non-executive directors if it gained control of BET.