Former Granada boss Sir Gerry Robinson has confirmed his interest in tabling a takeover offer for pest control-tohygiene group Rentokil Initial.
Sir Gerry, who last month set up Raphoe Management as a vehicle for investing in under-performing companies, said he intended to approach the Rentokil board to discuss the possibility of making an offer.
It comes after a weekend of speculation in which the former chairman of drinks group Allied Domecq was said to have been approached by a small group of investors about Raphoe buying a ten per cent stake in Rentokil and Sir Gerry becoming executive chairman.
A statement from Raphoe confirmed it had taken soundings from certain shareholders of Rentokil Initial and that it intended to approach the Rentokil board about an offer for the company. It will also seek discussions with the trustees of the Rentokil pension funds.
Raphoe added: "Raphoe intends to approach the board of Rentokil to discuss the possibility of making an offer for Rentokil and to seek discussions with the trustees of the Rentokil pension funds.
"This announcement does not constitute a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made."
Rentokil shares jumped 13 per cent to 171p, valuing the company at more than £3 billion.
Investors in East Grinstead-based Rentokil are understood to be becoming frustrated at the time taken to turn the group around.
The group's profits fell by 25 per cent during 2004, a year which also saw the departure of long-time chairman Sir Clive Thompson and chief executive James Wilde, who had only held the post for 18 months.
Since then chairman Brian McGowan and new chief executive Doug Flynn have significantly increased investment in sales, marketing, service, IT and personnel in a bid to make progress.
But in May this year the group said profits had fallen by 16.5 per cent during the first four months of 2005 as it continued to face challenges from a difficult, pricecompetitive market.
Shareholders will be hoping to see some improvement in the group's fortunes when it reports interim profits on Thursday.
Sir Gerry, a former chairman of media group Granada and spirits giant Allied Domecq, set up Raphoe in July to buy struggling companies.
Rentokil's businesses range from rat-catching to security services.
The firm reiterated in May that its performance in 2005 would be weaker than in 2004.
In a statement Rentokil said: "The board of Rentokil Initial notes the announcement this morning by Raphoe Management that it intends to approach the company to discuss the possibility of making an offer for Rentokil.
"At this stage no such approach has been received. The board will consider any proposal that Raphoe makes in the context of the value available to shareholders from the plans that the new executive team has for the company.
"Shareholders are advised in the meantime to take no action."
Shares closed up 151/4 to 1661/2p.