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Nelson Peltz’s Trian Partners has taken a board seat at Rentokil Initial, just two weeks after a profit warning sent shares in the pest control company down by a fifth.
Trian, an activist investor with a 2.3 per cent stake in the group, has appointed its head of research Brian Baldwin to the company’s board as a non-executive director.
London-listed Rentokil has been struggling with the integration of its US business Terminix, which it acquired for $6.7bn in 2021, and earlier this month issued a profit warning.
Rentokil’s chair Richard Solomons welcomed the appointment, saying he was looking forward to working with Trian, in particular on plans to integrate the Terminix business, “and to increase organic growth in our North America operations”.
Baldwin, who will join the board in less than a week, said there was “significant potential and runway for growth that can be achieved by leveraging its strong brands and market leading positions, particularly in the US”.
Rentokil warned earlier this month that troubles in its North America business would shave about £50mn from its operating earnings, sending its shares down by a fifth and wiping more than £2bn from the company’s market value.
It said adjusted profits before tax and amortisation this year would be about £700mn, lower than the £766mn it made last year.
Chief executive Andy Ransom attributed the downgrade to a poorly executed turnaround plan and slow integration of its new US branches. The US accounts for more than half of group sales.
The company previously issued a profit warning relating to its US business last October. The warning that a difficult consumer environment had hit demand in its key market sent shares down 20 per cent.
But Rentokil’s shares recovered in June after it emerged that Trian had taken a stake in the group. Peltz’s fund is known for launching turnaround campaigns at consumer goods companies including Kraft Heinz, Procter & Gamble and Unilever. Shares in Rentokil were up more than 3 per cent in early trading on Wednesday.
Peltz has also previously taken a stake in UK plumbing and heating equipment supplier Ferguson.
Rentokil said on Wednesday that Trian owns about 57.1mn shares in the company, amounting to a 2.3 per cent stake.
