Rentokil has embarked on its own business shake-up

Under plans put forward by the former Granada chairman, 35 pence per share - or around �600m ($1.1bn)- would be returned to shareholders.

He would also become chief executive of the hygiene-to-security group.

Sir Gerry also warned he would consider a takeover or call a meeting of investors if his plans were rejected.

However, Rentokil said the substance of the plans were to install Sir Gerry as chief "at significant cost".

It also claimed that a number of his proposals, such as management appointments and a review of the firm's capital structure, were already being "actively pursued" by the company.

Plans rejected

"Sir Gerry wants the shareholders to give up more than �75m of the company's equity and in return he may give them up to 35p per share of their own cash," Rentokil chairman Brian McGowan said in a statement.

Shares in the company surged late last month after Sir Gerry hinted he was considering a bid for the company.

However, he did make clear that his latest proposals were not a firm intention to take over the company.

The firm, known for its pest control business, has suffered in recent years - losing both its chairman and chief executive in 2004 following poor results and a profit warning.

Its latest chief executive, Doug Flynn, joined the company six months ago and has since embarked on a drive to turn around the firm ,which he said was too introspective and focused on short-term goals.

His first plan of action has been to announce the sale of the group's Initial Style Conferences division, which provides training and conference facilities in the UK, saying that its stand-alone operating basis made it easy to sell off.

The sale was announced as the firm revealed that pre-tax profits before one-offs for the six months to 30 June fell 20% to �135.4m compared with the same period last year.