CITY WHISPERS: Short-sellers spread poison Rentokil

Rentokil has confirmed its dominance as the ‘leading global pest control company’ following its £6bn acquisition of rival Terminix.

The FTSE 100 company closed the deal – a mix of cash and stock – in December 2021. So far, so good.

But Rentokil also dominated the UK short-seller list earlier this week with a whopping 9.9 percent of its shares lent to hedge funds, expecting the share price to fall, though this has since fallen to 6.1 percent.

That was a record share for Rentokil and is still up from about 5 percent in September.

The £900m bet came weeks after Shadowfall Capital – the research firm best known for exposing German payment processor Wirecard – released a research note questioning the numbers around margins in its decontamination business during the pandemic.

Rentokil denies any wrongdoing.

Shadowfall has gone after other companies, including Boohoo, the stock with the most short positions.

Mixed Fortunes for Frontier Boss

Mixed fortunes for Frontier Developments boss Jonny Watts.

He has been with the video game developer since 1998 and longtime Chief Creative Officer. In August, he took up the position of general manager, succeeding founder David Braben.

However, his pay package fell 82 per cent to £449,000 in the last fiscal year, down from £2.6m the year before when he exercised stock options.

Financial boss Alex Bevis also saw a significant decline.

Flotations hard to find

It was only a few weeks ago that optimistic city sources told us there would be a steady stream of IPOs from small and medium-sized companies from late September to early November.

The announcement on Thursday that World Chess was gearing up for a £50 million listing next month was welcome.

But Sustainable Farmland Trust, which cut its £200m fund on Monday, confirmed to many that there was little hope for a full recovery.

The trust, which manages parts of farmland, revealed the listing less than a month before the U-turn.

It said it had received “excellent” feedback from institutional investors, but tumultuous markets made it difficult to make new commitments.

Yaks.

Dividend yield encourages savers

The return of dividends since the wild year 2020 has been a boon for savings and pensions.

Share buybacks and one-off payouts have also been of great help during the stock market turmoil.

Such one-time payments could become even more important if regular dividend policy grinds to a halt in the wake of the latest financial woes, as broker Shore Capital has warned.

Share prices in the FTSE100 and FTSE250 have fallen in a number of sectors on the most recent market rollercoaster, which Shore Capital says may “mask some uncertainty” about whether dividend policy is still viable.

Increased inflation and a fall in the pound could “provoke a cautious approach to dividend payments,” it said.