Rentokil Initial has scored a coup by bringing in the former ICI management team to get it back on the right track. However, the arrival of John McAdam as chairman and Alan Brown as chief executive has not put to rest speculation that the company will be broken up. A 20 per cent rise in the shares this morning said as much.

McAdam and Brown presided over the sale of ICI to Akzo Nobel in 2007 for £8 billion and that will convince many investors that they are merely looking for an opportunity to sell or break up Rentokil, despite the three-year share incentive plan which promises them massive rewards. McAdam sold off several underperforming ICI businesses such as chemicals unit Uniqema, before selling the whole business to Akzo, so it's not as if he does not have form in this area.

Seymour Pierce analyst Kevin Lapwood, who has a break-up value for Rentokil shares of 117p, certainly believes that is the likely direction for the group under the ICI team's leadership.

The trouble with Rentokil is knowing where to start. For all the criticism of Doug Flynn, the former chief executive, he has at least sold off some of the more troublesome parts of the business and he made a rapid decision to replace management at City Link after the botched integration of the Target Express delivery business.

One of the main problems that McAdam and his team will have to challenge is the desperately low morale that many of Rentokil's 77,000 workforce now feel after years of turbulence, management changes and poor performance. Tackling these core problems will be central to any successful turnaround.

Rentokil is an international business with a great brand name that people should be proud to work for. Outsourcing businesses should thrive in times of economic turbulence - when they can pick up work from struggling coroporates. McAdam's crack team first needs to give the company its confidence back.

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