Billionaires swoop on FTSE giants: Peltz digs his claws into Rentokil

Two of the richest men in the world have snapped up stakes in stalwarts of the London stock market.

In moves that will raise eyebrows in boardrooms across the City, Mexican billionaire Carlos Slim bought more than 3 per cent of BT while US activist Nelson Peltz took a major holding in Rentokil.

The stake-building is likely to be seen as further evidence that British firms are hugely undervalued, making them attractive to investors – and buyers.

The stock market has seen what has been described as a ‘relentless feeding frenzy’ of takeover activity this year as foreign bidders seek to snap up London-listed companies on the cheap.

Last night Slim and Peltz remained tight-lipped over their plans for BT and Rentokil, which are long-standing members of the FTSE 100 index of leading blue-chip stocks. But the investments will raise questions over the futures of both firms.

Big hitters: Activist investor Nelson Peltz (right) has taken a major stake in pest control group Rentokil while Mexican billionaire Carlos Slim (left) bought more than 3% of BT

Slim, whose 3.2 per cent stake in BT is worth £400million and was bought through his family business Inbursa, joins other high-profile investors on the shareholder register, including telecoms billionaire Patrick Drahi and German group Deutsche Telekom.

Drahi is currently BT’s largest shareholder, with a 24 per cent stake.

New BT boss Allison Kirkby has embarked on a turnaround plan since taking over in February.

Last month she outlined her blueprint, which included another £3billion of cost-cutting, sending shares up more than 17 per cent in their biggest one-day gain for nearly quarter of a century.

But Karen Egan, telecoms expert at Enders Analysis, said the swoop from Slim showed the group was still ‘undervalued’.

‘The telecoms sector as a whole has been out of favour with investors for a long time,’ she said.

Slim, estimated to be the 17th richest man in the world, made his £72billion fortune from America Movil, the largest telecoms group in Latin America.

BT said last night that ‘we welcome any investor who recognises the long-term value of our business’ and ‘look forward to engaging with Inbursa just as we do with all investors’.

A spokesman for Slim, the richest man in Latin America, described it as ‘a financial investment – something the group usually does’.

Paolo Pescatore, a telecoms expert at PP Foresight, said: ‘This is a bolt out of the blue and one that underlines the confidence in BT’s strategy and growth plans under Kirkby.’

Slim’s investment in BT emerged just hours after Peltz’s hedge fund Trian Partners revealed it is now a top ten investor in royal ratcatcher Rentokil.

Lucrative: Rentokil’s rat catching services are in demand

Analysts expect Peltz, 81, to wage a proxy campaign at the company, and warned this could even involve a push to switch its primary stock market listing to New York in yet another blow to the City.

Rentokil’s stock soared 13.7 per cent, or 57p, to 472.2p yesterday after the Wall Street asset manager said it has contacted Rentokil’s top brass to discuss boosting shareholder value.

Peltz is a prolific activist investor who has battled with the boards of household name businesses including Disney, Procter & Gamble and Heinz.

AJ Bell investment director Russ Mould said Peltz was ‘likely to pursue a big shake-up’.

‘This could include a push to shift its primary listing to the US, which would be another blow to the prestige of London as a listing venue,’ Mould said.

It comes at a crucial time for London’s stock market, which has suffered a mass exodus of firms.

Trian said it ‘looks forward to working with Rentokil’s leadership team’.

Peltz, whose daughter Nicola is married to David and Victoria Beckham’s son Brooklyn, last month sold his stake in Walt Disney for a reported $1billion (£780million) after losing a boardroom battle.

He is also on the board of Unilever, which is the London-listed maker of Dove soap and Hellmann’s mayonnaise.

And within weeks of Peltz taking a stake at Ferguson in 2019, it unveiled plans to spin off historic UK division Wolseley and appoint a new chief executive.

Ferguson then moved its listing to the US three years later.

Peltz won a seat on the Heinz board in 2006 after a bitter proxy battle and became instrumental in the baked bean brand’s merger with US firm Kraft, and the spin-off of Mondelez.