SUSSEX-based multinational Rentokil Initial has broken a long standing habit by selling off one of its major subsidiaries.

After several years of acquisition-led growth, the company, which has its headquarters at East Grinstead, has announced that it is to dispose of DSI Transports, its US-based distribution business, to Trimac Transportation of Canada.

The sale price is around £49 million.

Sir Clive Thompson, Rentokil's chief executive and the current president of the Confederation of British Industry, said: "The sale of DSI represents a good start to the implementation of our plan to dispose of non-core activities.

"The price of £49.3 million represents a price earnings ratio of 36.3 times 1999 profits which makes this an earnings-enhancing deal."

He added that Rentokil Initial, now the worl's largest business services company, was continuing to work with its advisers on the disposal of other non-core activities through either sale or demerger.

"We will, of course, update shareholders as to progress at the time of the announcement of our 1999 preliminary results on March 1," said Sir Clive.

Non-core businesses expected to be put up for sale include crane hire, distribution services in the UK, Europe and America, as well as some personnel services in Britain and the US.

City analysts said a successful disposal strategy would invigorate Rentokil's share price which has wilted over the last few months.

Sir Clive said the company will also be despatching a circular to its shareholders seeking approval for the repurchase of shares.

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