Rightmove (LSE:RMV) and Rentokil (LSE:RTO) are two FTSE 100 shares that attracted lots of curiosity on 11 September. That’s as a result of the previous rejected a takeover strategy and the latter launched a disappointing buying and selling replace.

However ought to I add both of them to my portfolio?

Sizzling property

On 2 September, Rightmove introduced that it had obtained an sudden takeover strategy from REA Group, an Australian firm that operates a lot of actual property web sites all over the world.

In my view — though a possible acquisition is smart from a strategic viewpoint — they’ve supplied an excessive amount of. If I used to be a shareholder, I’d be screaming from the rooftops for the administrators to conform to the deal. As a substitute, they’ve rejected the bid.

For the 12 months ending 31 December 2024 (FY24), analysts predict fundamental earnings per share (EPS) of 25.98p. The supply values the corporate at 698p — implying a ahead price-to-earnings ratio of 26.5. To place this in perspective, the Magnificent Seven are presently buying and selling on a a number of of 23.9.

And I feel there’s little on the corporate’s stability sheet to justify this valuation. At 30 June 2024, it had internet belongings of £66m, giving an eye-watering price-to-book ratio of 80.

However when the takeover strategy was rejected, Rightmove’s share price didn’t transfer. This means shareholders predict an improved supply to be made by REA (or another person). Collectively, traders clearly consider the corporate’s price a minimum of £5.3bn, its present market cap.

That may very well be as a consequence of the truth that it has an 86% market share of a “selection of the top property portals”.

It must also profit from the anticipated enchancment within the UK property market if (as anticipated) rates of interest proceed to be minimize.

Additionally, the federal government’s emphasis on housebuilding to assist increase financial progress ought to add to the property portal’s backside line.

However regardless of these positives, its present valuation appears on the excessive aspect to me. I don’t see a lot additional upside, due to this fact I wouldn’t need to make investments.

Unhealthy information

Rentokil’s shares tanked almost 20% after the pest management and hygiene group issued a earnings warning after reporting disappointing gross sales in North America. The territory accounts for about 60% of income so any issues within the area are going to have a disproportionate affect.

On the day, the inventory hit a 52-week low. It’s not been a great 12 months for the corporate’s shareholders. Its shares have fallen 34% since September 2023.

However this may very well be a possibility to get a top quality inventory at a knock-down price.

By way of a mixture of acquisitions and natural progress, Rentokil has seen its income improve from £2.7bn in 2019, to £5.4bn in 2023. Throughout this era, its adjusted EPS has risen by a formidable 61%.

However I don’t need to purchase, principally as a result of I nonetheless suppose there’s some uncertainty over its enterprise in America. It doesn’t sound as if issues have improved. The corporate mentioned “the trading performance in July and August was lower than anticipated”.

This makes me nervous.

Additionally, Rentokil’s dividend is on the imply aspect. It elevated its interim payout by a formidable 14.9%, in comparison with FY23. However even when it did this with its remaining dividend, it might nonetheless solely be yielding 2.6%.

This isn’t sufficient to compensate me for the chance that I’d be taking by investing now.