CITY WHISPERS: Short-sellers spread poison around ‘leading global pest control company’ Rentokil
Rentokil has cemented its dominance as the ‘leading global pest control company’ after completing its £6billion takeover of rival Terminix.
The FTSE 100 firm struck the deal – a mix of cash and shares – in December 2021. So far, so good.
But Rentokil also dominated the UK’s short-seller list earlier this week with a whopping 9.9 per cent of its stock out on loan to hedge funds betting its share price would fall, though this has since dropped to 6.1 per cent.
Nuisance: Rentokil dominated the UK’s short-seller list earlier this week with a whopping 9.9 per cent of its stock out on loan to hedge funds
That was a record proportion for Rentokil and is still up from about 5 per cent in September.
The £900 million bet came weeks after Shadowfall Capital – the research outfit best known for exposing German payments processor Wirecard – released a research note questioning the numbers around the margins in its disinfection business during the pandemic.
Rentokil denies any wrongdoing.
Shadowfall has gone after other firms including Boohoo, which is the most shorted stock.
Mixed fortunes for Frontier boss
Mixed fortunes for the boss of Frontier Developments Jonny Watts.
An employee of the video game developer since 1998 and longtime chief creative officer, he took up the chief executive mantle in August, succeeding founder David Braben.
However, his pay packet slumped by 82 per cent to £449,000 in its latest financial year, down from £2.6million the year before when he exercised share options.
Finance boss Alex Bevis also saw a hefty drop.
Flotations hard to come by
It was only a few weeks ago that optimistic City sources were telling us there would be a steady trickle of flotations from small and mid-sized firms from late September to early November.
The announcement on Thursday that World Chess was gearing up for a £50million listing next month was welcome.
But Sustainable Farmland Trust scrapping its £200million float on Monday confirmed for many that there was little hope of a full-blown rebound.
The trust, which manages swathes of agricultural land, unveiled the listing less than a month before the U-turn.
It said it had had ‘excellent’ feedback from institutional investors, but that tumultuous markets meant it was hard for it to make new commitments.
Yikes.
Dividend return boosts savers
The return of dividends since the wilderness year of 2020 has been a boon for savings and pensions.
Share buybacks and one-off payouts have also been a big help during stock market turmoil.
Such one-off payments could become even more important if regular dividend policies stall in the wake of the latest financial bedlam, as broker Shore Capital has warned.
Share prices in the FTSE100 and FTSE250 have dropped in a number of sectors in the most recent market rollercoaster, which Shore Capital says may ‘mask some uncertainty’ about whether dividend policies are still viable.
Increased inflation and a fall in the pound could ’cause a cautious approach to dividend payouts’, it said.