Rentokil jumps as Trian partner takes seat on board

Rentokil Initial surged on Wednesday after it announced the appointment of a representative of Nelson Peltz’s Trian Fund Management to its board as a non-executive director.

The company said that Brian Baldwin - head of research at Trian - has been appointed with effect from 1 October. He will also become a member of the Nomination Committee and Remuneration Committee from the same date.

Baldwin has been a Trian partner since 2013 and a member of Trian's investment team since 2007. Rentokil said he has played leadership roles in many of Trian's investments.

Trian took a 2.26% stake in the pest control company in June.

Rentokil chairman Richard Solomons said on Wednesday: "We are delighted to welcome Brian to the board of Rentokil Initial and we look forward to working with him to deliver long-term sustainable value for our shareholders and, in particular, executing our plans to integrate the Terminix business and to increase organic growth in our North America operations.

"We continue to work towards the substantial structural growth opportunities for our pest control business, enhanced by the benefits of the Terminix transaction."

At 1015 BST, Rentokil shares were up 4.7% at 377.50p.

Russ Mould, investment director at AJ Bell, said: "Pest control outfit Rentokil was not in a strong position to refuse any requests from activist investor Nelson Peltz, so news that a representative from his Trian Fund Management vehicle is joining the board shouldn’t come as a big surprise.

"After serving up a doozy of a profit warning earlier this month, Rentokil’s board is hardly in a position to suggest it doesn’t need help or fresh ideas, and it will be interesting to see where Peltz looks to exert pressure.

"Weaker than expected revenue at Rentokil has been compounded by internal problems around the integration of acquired branches and poor cost control as the company strained to hit sales targets. This state of affairs does not reflect well on the company’s discipline.

"Already seen as an expensive deal when first unveiled, the acquisition of Terminix in 2022 is proving increasingly costly over time as Rentokil has struggled to bring the business fully into the fold.

"All in all, having joined the shareholder register in June, Peltz has a mandate to push for meaningful change at Rentokil. That might include shifting the primary listing to the US and potentially selling off underperforming parts of the business. Management changes also cannot be ruled out."