Rentokil Initial Plc share values increased tthe highest in two years after its disposal of City Link Express delivery business. The total cost of the divestment was GBP40 million or US$62.1 million and it was all shouldered by the renowned pest control provider.
After the sale, Rentokil shares jumped by as much as 8.6% to 105 pence per share and was still increasing 5.1% at 9:05 am in London's trading. The volume traded in the first hour was more than half of the three month daily average as Rentokil with the second largest increase at the FTSE 350 index.
A token 1 pound was paid by Better Capital Investment Fund for the City Link takeover. The equity firm would invest a total of GBP40 million to complete the takeover and reorganization. For its part, the West Sussex, England based pest control firm would be charging GBP30 million for write-offs and additional cash cost of GBP10 million for the second quarter.
According to Rentokil CEO Alan Brown, "City Link has now turned the corner five years of substantial losses." It is for this reason, according to the CEO, 'has decided to divest of City Link at this stage of the turnaround so that we can concentrate on our core international business.'
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