Nelson Peltz' activist fund Trian Partners takes seat on Rentokil's board

By Louis Goss

Nelson Peltz activist fund Tiran Partners has taken a seat on Rentokil Initial's board, just two weeks after the cockroach killer saw its stock price plunge to a multi-year low on a profit warning about its North American business.

Terminix owner Rentokil Initial said Trian partner Brian Baldwin will take up a seat on its board of directors, starting on Oct. 1. Trian Partners in June previously confirmed to MarketWatch that it had acquired a "significant position" in the British pest control company.

"Trian believes Rentokil has significant potential and runway for growth that can be achieved by leveraging its strong brands and market leading positions, particularly in the US," Trian's head of research, Baldwin, said in a statement.

Rentokil Initial (UK:RTO) (RTO) shares, listed on the London Stock Exchange, increased 5% on Wednesday, having lost 36% of their value over the previous 12 months on the back of a series of profit warnings relating to a slowdown in its North American business.

Baldwin is currently head of research at Trian Partners, having first joined the activist fund in 2007. Prior to joining Peltz' hedge fund, Baldwin worked as an analyst at Merrill Lynch Global Private Equity, having previously graduated from The Wharton School.

Rentokil Initial chairman Richard Solomons welcomed Baldwin's appointment as he said the board is now looking forward to "executing our plans to integrate the Terminix business and to increase organic growth in our North America operations."

The Crawley headquartered company's GBP4.5 billion ($6 billion) acquisition of Memphis, Tennessee-headquartered Terminix international in Oct.2022 saw Rentokil Initial become the world's largest pest control firm.

A slowdown in the U.S. economy subsequently saw Rentokil issue a profit in Oct. 2023 on concerns about slumping sales in its Terminix-dominated North American business, which caused Rentokil shares to drop by more than a fifth.

Earlier this month, Rentokil shares fell by another 18% after the company said it expects to suffer another GBP80 million hit to its full year profits due to a slowdown in its North American business.

Trian Partners later acquired an approximately 2.26% stake in Rentokil Initial in June this year. Peltz' hedge fund is known for having led successful activist campaigns against high profile firms including Heinz, DuPont and Disney.

"We continue to work towards the substantial structural growth opportunities for our pest control business, enhanced by the benefits of the Terminix transaction," Rentokil chairman Solomons said in a statement.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-25-24 0604ET

Copyright (c) 2024 Dow Jones & Company, Inc.