Intertek is the third FTSE 100 company to be taken out this year, following fund manager Schroders and specialist insurer Beazley. The product testing and quality inspection firm agreed to a £10bn takeover by a consortium led by Swedish private equity firm EQT, after weeks of negotiation.
A predictable outcome
The takeover felt inevitable from the moment EQT made its initial approach in April. The board initially dismissed the opening offers as derisory, but eventually recommended the fourth bid at £60 per share, a 60% premium to the pre-bid price. City analysts had predicted this level would be hard to resist.
Rational capitulation
The board's decision to recommend the offer is likely rational. While there was brief mention of an alternative strategy involving a breakup and US listing for consumer operations, such ideas would have been better raised two years earlier. In the current environment, shareholders preferred the certainty of cash, especially with activists on the register.
Broader market concerns
Intertek's exit is part of a worrying trend. Schroders was acquired by Chicago-based Nuveen, and Beazley by Swiss rival Zurich. Energy and services company DCC is also nearing a deal with KKR and Energy Capital Partners. Meanwhile, new listings on London's main market are scarce—only three this year, none large enough for the FTSE 100.
More concerning is Doncasters, a 246-year-old UK engineering firm, choosing to list in the US for a valuation above $4bn. This challenges the assumption that mid-market aerospace component makers see London as their natural home.
Need for a big listing
Brokers suggest the pipeline of potential new arrivals is improving, but London's reputation as an undervalued market where private equity hunts for bargains persists. A major, buzzy new listing is desperately needed to shift this perception and restore confidence in the London Stock Exchange.
