Gerry Robinson, the former head of Granada Television, has confirmed he is considering a takeover bid for Rentokil Initial, the firm that specialises in services as diverse as rat-catching and security. Raphoe Management Ltd, a company set up by Donegal-born Mr Robinson in July, said that having taken soundings from certain Rentokil shareholders, it intended to approach the company's board to discuss the possibility of making an offer.
Shares in Rentokil surged by 10 per cent yesterday as the company said it would look at any approach.
"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," it said.
Rentokil's businesses have been struggling in recent years, prompting the company's shares to trade at levels two-thirds below their highs of 1999.
The company ousted its long-standing chairman, Clive Thompson, last year, replacing him with a new management team led by chairman Brian McGowan and chief executive Doug Flynn.
But in May, the company warned that its 2005 performance would be weaker than in 2004 as stiff competition combined with spending cuts by customers.
Rentokil is due to present its first-half results on Thursday and investors have been looking forward to hearing the new management's plans for turning the company around.
However, if Raphoe succeeds in a bid for the company, Mr Robinson is widely expected to assume the position of executive chairman.
A spokesman for Mr Robinson (56), who stepped down as chairman of Allied Domecq following its takeover by Pernod Ricard earlier this year, said he had trimmed back his non-executive engagements of late, leaving him free to assume a hands-on management role.
"He feels he has one more landmark contribution to make," the spokesman said.
The son of a carpenter, from Dunfanaghy in Co Donegal, Mr Robinson rose to prominence after leading a management buyout of Grand Metropolitan's contract services division, the Compass Group, in 1987.
He became famous in the City for his hostile takeover of Forte, and he built Granada into the biggest player in independent television. More recently, he has found wider fame as presenter of the BBC2 television show I'll Show Them Who's Boss, in which he offers management advice to businesses.
Raphoe, which is more than 50 per cent owned by Mr Robinson and is also backed by Europa Partners, the boutique investment bank, was set up to target underperforming companies with inappropriate management or inefficient capital structures.
Existing Rentokil shareholders, which include the US-based Franklin Resources, Janus Capital Management and Legal & General, are expected to retain a 90 per cent equity stake as part of any offer from Raphoe, although the precise structure of an offer has yet to be determined.
