Intertek (ITRK) backs EQT's £9.4bn bid as UK buyouts revive

Intertek (ITRK.L) said it was minded to recommend EQT’s final £60-a-share cash proposal, a £9.4 billion equity offer valuing the testing and inspection group at roughly £10.6 billion including debt. Large take-privates have been harder to finance since rates rose, yet EQT kept returning with richer terms until it had a cash price the board could publicly support. For London’s market, the approach amounts to a live test of whether private equity can still close big quoted deals without the cheap debt that powered the last buyout cycle.

Under the terms the company set out, shareholders would receive £60 in cash and retain the final FY25 dividend of 107.7p a share. The proposal equates to a 40 per cent premium above where the stock traded before EQT’s first approach became public. Once a bidder is offering both a full premium and a retained dividend, investors tend to ask less about corporate independence and more about whether the offer already captures most of the near-term upside.

The board’s language was sharp. It said the proposal “deliver[s] value in cash to Intertek shareholders at a level which it would be minded to recommend”, a shift from three earlier bids that failed to get over the line. Reuters later reported that shareholder pressure helped bring the company back to the table. The deal is not yet binding, but the balance of power changes once a target moves from refusing to engage to signalling the financial terms are good enough to endorse.

Shares still traded with a sliver of caution. Intertek was last quoted at 5607.5p on the London Stock Exchange, below the £60 offer level. The gap was narrow but it suggested the market was allowing for timing risk and the possibility a formal offer might take longer to land than the headline implies.

Financing is the harder issue now. Buyout firms can still borrow, but not on the terms they enjoyed when money was close to free, and every extra turn of debt matters more. EQT’s willingness to keep raising a proposal on a FTSE 100 company suggests it sees enough value in Intertek — or enough scope to justify the debt package — to live with that higher hurdle. It became a serious offer only when EQT proved it was prepared to pay through the cycle, not an opening shot that vanished at the first sign of resistance.

Why it matters for UK deals

PitchBook cast EQT’s pending $14.3 billion Intertek takeover as part of a wider run of UK take-privates, and that framing fits the broader mood around London’s equity market. New listings have been patchy, valuations have often looked more forgiving than in the US, and boards have had to answer harder questions about whether public shareholders are really being paid for the assets they own. A sponsor returning with a sweeter bid for a large listed company adds to that pressure, suggesting private buyers still see cases where quoted valuations and private market ambitions have not fully converged even after borrowing costs reset higher.

The board did not move on symbolism. It moved when the headline price reached £9.4 billion, or about $12.7 billion on Reuters’ calculation, and when shareholders were allowed to keep the 107.7p dividend. Big funds increasingly judge take-private offers on total cash value, not only on a bare premium percentage. In a market where financing costs more, bidders cannot rely on optimism. They have to make the arithmetic feel immediate and hard to replicate through a patient wait for the public market to rerate the stock.

Dan Coatsworth of AJ Bell put the investor reaction plainly: “There is a right price for everything as Intertek investors have just found out.” Intertek is neither a distressed target nor a rescue situation. It is a sizeable, established company where the negotiation turned on valuation. Three earlier bids were not enough. A £60-a-share proposal, plus the retained dividend, was. For rival sponsors watching the tape, that is the useful read-across: large public deals can still advance in a higher-rate cycle, but only if bidders answer the valuation question directly with cash.

Execution is EQT’s next challenge. For the wider market, the signal is already clearer. If a £9.4 billion bid can move a FTSE 100 board to conditional support in a costlier borrowing environment, private equity is still willing to pursue large listed UK assets when the valuation case is compelling enough.