Rentokil Initial Plc (RTO) dropped the most in 4 1/2 years after Deutsche Bank AG (DBK) said it’s selling almost 193.7 million shares in the U.K. pest-control and hygiene-services company on behalf of Invesco Perpetual Ltd.
Rentokil fell 6.9 percent, the steepest decline since March 2009, to 104.5 pence at the close in London. The disposal could raise as much as 209 million pounds ($335 million), according to a person familiar with the transaction, who asked not to be identified because the terms are private.
Invesco, Rentokil’s biggest shareholder, is reducing the holding after its fund manager, Neil Woodford, said on Oct. 15 that he was leaving the firm after 25 years. The U.K. hedge fund’s stake totals about 25 percent, according to data compiled by Bloomberg. Shares in Rentokil, which has headquarters at Gatwick Airport outside London, fell 2.9 percent after Woodford announced his departure.
“Woodford’s leaving means there will be redemptions, and they will sell some of their holdings,” said David Greenall, an analyst at RBC Capital Markets LLC. “If the stock’s placed at 106, which it was, and it’s a big placing affecting 11 percent of the company, then the shares are going to hover around that kind of level.”
Deutsche Bank said in a statement that it will be the sole manager in the sale. A spokesman for Rentokil Initial declined to comment on the share sale.
Trading volume in Rentokil shares were about seven times the three-month daily average. The stock has gained 9 percent this year, valuing Rentokil at 1.9 billion pounds. Today’s decline was the biggest on the FTSE 250 Index.
Of 21 analysts who follow Rentokil and share their findings with Bloomberg, 10 recommend holding the stock, six suggest selling and five advise buying. The average 12-month stock-price projection is 101.79 pence, based on 14 estimates, implying a potential decrease of about 2.6 percent.
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