Citi upgrades Rentokil on Terminix deal

Rentokil Initial

395.80p

12:40 24/12/24

0.23%

0.90p

Citi upgraded Rentokil Initial to ‘buy’ from ‘neutral’ on Thursday, arguing that the proposed acquisition of US rival Terminix could propel the company into the number 1 slot in US pest control.

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Support Services

10,551.01

12:54 24/12/24

0.34%

35.43

It would have estimated market share of 25%, followed by Rollins with 20%, Ecolab with around 5% and Anticimex with 4-5%, Citi said.

"Based on State by State branch footprint analysis, we feel confident that Rentokil can significantly outperform management’s synergy target, possibly 2x," the bank said.

It has a 650p price target on Rentokil shares.

Rentokil announced in December that it had agreed to buy Terminix in a $6.7bn deal. It said the combination was expected "to create significant value, enhance long-term growth potential, be highly cash generative and present a compelling industrial logic".

At 1250 GMT, the shares were up 2.6% at 529.20p.