Freshfields and DWS advise on Rentokil rejig

Freshfields Bruckhaus Deringer and Denton Wilde Sapte (DWS) have teamed up to advise FTSE 100 business services company Rentokil Initial on its corporate restructuring following the introduction of new international accounting rules.

The reorganisation has created £1.8bn of distributable reserves for Rentokil, which will be used to offset the impact of the International Financial Reporting Standards (IFRS) on the level of its existing reserves and to meet dividend requirements in the medium to long term. It is thought that Rentokil is the first company to undergo a restructuring since the accounting rules were introduced on 1 January this year. Under the new rules, companies must show their pension fund deficits as a liability on their balance sheets.

Freshfields and DWS were both instructed to advise Rentokil on the deal because of their previous work for the company in specific practice areas. Freshfields has been Rentokil’s main adviser for the company’s major M&A and litigation work. However, this is believed to be the magic circle firm’s first major corporate instruction from Rentokil since 2001.

Meanwhile, DWS has delivered financing, employment and pensions advice to Rentokil.

The Rentokil makeover has involved the intro-duction of a new listed group holding company, Rentokil Initial plc, and a reduction of its share capital.

London corporate partner Will Lawes led the Freshfields team, while banking partner James Curtis and corporate partner Simon Mitchell headed the team for DWS. Clifford Chance advised Rentokil’s financial adviser UBS.