Investing.com - Trian Fund Management LP, directed by activist investor Nelson Peltz, has acquired a substantial stake in UK-based pest-control company Rentokil Initial (NYSE:RTO), sources familiar with the matter told Bloomberg on Tuesday.
The investment firm now ranks among the top ten shareholders in Rentokil, the owner of Terminix in the US. Trian has reportedly reached out to Rentokil to discuss strategies, although the specifics of these conversations remain confidential.
The exact size of Trian's stake and its plans for Rentokil have not been disclosed. Representatives from Trian declined to comment, while Rentokil has not yet provided a response.
Over the past 12 months, Rentokil's shares have lost over a third of their value in London, resulting in a market capitalization of approximately £10.5 billion ($13.3 billion). The company also has depositary receipts listed in New York.
According to its annual report, Rentokil generated most of its 2023 revenue, approximately £3.3 billion, in North America.
It currently trades at about 27 times earnings, whereas its US counterparts, Ecolab Inc (NYSE:ECL). and Rollins Inc (NYSE:ROL)., trade at approximately 42 times and 53 times earnings, respectively.
In 2019, Trian took a roughly 6% position in Ferguson Plc (NYSE:FERG), a supplier of plumbing and heating products. Trian pointed out that Ferguson was trading at a discount to its US peers despite having an "attractive" North American business. Following its primary listing move to New York in May 2022, Ferguson's shares surged about 65%.
Trian has recently engaged in battles with notable companies, including Walt Disney Company (NYSE:DIS), where Peltz contested for a board seat against CEO Bob Iger's team. Disney eventually prevailed, with all its nominees securing shareholder support.