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 is a firm offer.
The deal is worth £10.6bn including debt, or £9.4bn without. The previous bids were pegged at £58, £54 and £51.0 a share. Intertek shares jumped almost 7% to £56.65 on Wednesday morning.
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. Its business empire has been estimated to be worth $40bn (£29.6bn), Bloomberg reported.
Intertek, which had kicked off a review of its business a month ago, 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 jointed the FTSE 100 index in 2009. It has 45,000 employees and has 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 called on the testing and certification firm to accept the latest offer.
The fund Lost Coast Collective, which owns 1.2% of Intertek and is managed by Matt 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.”
The final proposal from EQT is subject to a number of preconditions, including completion of due diligence, Intertek said, adding that it had paused work on the strategic review.
It had started to evaluate the potential separation, through a sale or demerger, of its energy and infrastructure division (with £1.6bn annual revenue) from its product testing business (with 1.9bn revenue).
Investor AB was founded by the Wallenbergs in 1916 but the family’s business interests date back to 1856 when André Oscar Wallenberg founded Stockholms Enskilda Bank (SEB today).
Marcus Wallenberg wrote to his brother Jacob in 1946 “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.