Some of the largest investors in Intertek Group PLC are pressuring the British product-testing company to enter negotiations with private equity firm EQT AB, according to sources familiar with the matter. The push comes after EQT raised its bid to approximately US$12.1 billion, which Intertek has rejected as undervaluing the company.
Investor Pressure Mounts
Canada's PineStone Asset Management Inc., Intertek's third-largest shareholder with a roughly four percent stake, recently sent a letter to the company's board urging them to open discussions with EQT. Additionally, several other top 20 investors have been encouraging Intertek to engage with the buyout firm, following the rejection of multiple takeover proposals.
EQT's Latest Offer
This week, EQT increased its offer to £58 per share, valuing Intertek at about £8.9 billion (US$12.1 billion). However, Intertek stated on Friday that the bid "significantly undervalues" the company and carries "significant execution risk given its conditional nature." The company is pursuing a potential breakup and has received interest in its Energy & Infrastructure division.
Some top shareholders believe the latest bid is close enough to warrant engagement, though insufficient to finalize a deal. They hope EQT will raise its proposal to around £60 per share or more, a level at which Intertek might be more willing to negotiate.
Market Reaction
Intertek shares fell 4.7 percent in early London trading on Friday, giving the company a market value of approximately £7.4 billion. Deliberations are ongoing, and there is no certainty of a deal. Representatives for EQT and Intertek declined to comment, while PineStone did not respond to inquiries.
Intertek announced a strategic review in April and has received "encouraging level of interest" from potential buyers for its Energy & Infrastructure business, according to a company statement.
