Sir Gerry Robinson must be fuming. Back in the autumn of 2005 he approached Rentokil Initial, then a struggling support services combine, with a plan to inject his own super-charged management in return for a super-charged equity package.
Both the Rentokil board and its major investors blew a raspberry and Sir Gerry was eventually forced to issue an apology for wasting everyone’s time.
Now, less than three years later, with Rentokil still a struggling support services combine, chairman Brian McGowan and chief executive Doug Flynn are being replaced by a new management team fuelled by a super-charged equity package.
Except Sir Gerry isn’t involved. The chance of making super-sized returns falls to a team led by John McAdam, former boss of ICI.
To put things in context, if the McAdam team get the share price back up to 180p (just above where it stood when Sir Gerry wanted the job), the McAdam team will get stock worth £40m, with additional shares being released if and when the price tops 280p.
With shares in Rentokil spiking 25 per cent on Thursday (to 92p), the immediate betting is that the McAdam gang will try and attain these targets by breaking Rentokil up. One member is Andy Ransom, ICI’s senior lawyer and head of its mergers and acquisitions team, who will be in charge of “corporate development” at Rentokil.
Related links:
FT.com – McGowan and Flynn quit Rentokil
Rentokil Initial statement on board departures