The laboratory testing company Intertek has become the latest FTSE 100 business to agree to a takeover, backing a £10.6bn approach from a private equity firm owned by Sweden’s billionaire Wallenberg family.
After rebuffing three previous approaches, Intertek’s board said it was “minded to recommend” the £60-a-share tilt from the Swedish buyout firm EQT to shareholders, if there was a firm offer.
The deal is worth £10.6bn including debt, or £9.4bn without. The previous bids were pegged at £58, £54 and £51 a share. Intertek shares jumped almost 7% to £56.65 on Wednesday.
Other FTSE 100 companies to have accepted multibillion-pound offers this year include the insurer Beazley and the fund manager Schroders.
EQT was founded in 1994 as a spinout from Investor AB, the industrial holding company of the Wallenberg family. Its motto is “More than capital”, reflecting the Wallenbergs’ declared philosophy of responsible ownership. Their business empire has been estimated to be worth $40bn (£29.6bn), Bloomberg reported.
Intertek, which tests and certifies products before they go to market, had kicked off a review of its business a month ago. It said its board remained “highly confident in Intertek’s standalone strategy and the value-creation opportunity outlined in the strategic review”.
It added that, after evaluating the offer and speaking to investors, it would be minded to recommend the deal, which will then be voted on by shareholders.
Intertek, headquartered in London, dates back to the late 19th century when three pioneering businesses in the UK, Canada and the US combined. In 1885, it began testing and certifying grain cargoes before they were put to sea.
Intertek listed on the London Stock Exchange in 2002 and joined the FTSE 100 index in 2009. It has 45,000 employees and more than 1,000 labs worldwide.
The company, led by the chief executive, André Lacroix, had come under mounting pressure from some investors to sell up, including Matt Peltz, the son of the billionaire activist investor Nelson Peltz. Matt Peltz had called on Intertek to accept the latest offer.
The fund Lost Coast Collective, which owns 1.2% of Intertek and is managed by Peltz, told Intertek in a letter on Tuesday: “While the board and management may have confidence in a partial sale and an operational fix, the market clearly does not believe in the team’s ability to execute. If it did, the stock would be much higher.
“It is time to recognise the merits of EQT’s proposal and engage in good faith to complete a transaction.”
Investors have clashed over the takeover, with Palliser Capital, Harris Associates and PrimeStone Capital urging the Intertek board to engage with EQT, while others had asked the board to hold firm. Marathon Asset Management has said “fair value is over £60 a share”.
The final proposal from EQT is subject to preconditions, including completion of due diligence, Intertek said, adding that it had paused work on the strategic review.
Intertek had started to evaluate the potential separation, through a sale or demerger, of its energy and infrastructure arm. The division, which provides services to windfarms and others, and generates £1.6bn in annual revenues, would separate from its more consumer-facing product-testing business, which evaluates goods ranging from toys to food and footwear, and brings in a £1.9bn revenue.
Dan Coatsworth, the head of markets at the investment platform AJ Bell, said: “One by one companies are being picked off the UK stock market, with Gamma Communications also looking like it could join the queue soon.”
The FTSE-250-listed telecommunication services company said on Wednesday that the US private equity firm Providence Equity Partners was among its suitors, with discussions at a preliminary stage.
Investor AB was founded by the Wallenbergs in 1916 but the family’s business interests date back to 1856 when André Oscar Wallenberg created Stockholms Enskilda Bank, known as SEB today.
Marcus Wallenberg wrote to his brother Jacob in 1946 that “to move from the old to what is about to come is the only tradition worth keeping”, as he sought to convince him to switch from the family’s business interests in the railroad industry to the founding of the airline SAS.
