Why EQT’s Intertek (ITRK) bid exposes the valuation gap driving FTSE companies off London

Intertek Group plc (LSE: ITRK) has recommended a £10.9 billion acquisition by funds managed by EQT AB, placing another profitable FTSE 100 company on a potential path out of the London Stock Exchange. Shareholders would receive £60 in cash for each Intertek share while retaining the approved 107.7-pence final dividend, subject to the proposed transaction receiving the necessary approvals. The deal follows three lower approaches rejected by the Intertek board and offers a substantial premium to the company’s valuation before takeover interest became public. Beyond the immediate payment, the proposed acquisition exposes a deeper problem for London, where private capital repeatedly appears willing to recognise long-term corporate value that listed equity investors have discounted.

Why has Intertek become a symbol of the valuation divide between public and private markets?

Intertek is not an obvious distressed takeover target. The company operates more than 1,000 laboratories and offices across over 100 countries, serves hundreds of thousands of customers and provides testing, inspection, certification and assurance services that are increasingly necessary as products and supply chains become more complex.

The company generated £3.43 billion in revenue during 2025 and adjusted operating profit of approximately £619.6 million. Its services are linked to product safety, industrial standards, regulatory compliance, sustainability requirements and access to international markets. Many customers cannot simply abandon testing when economic conditions weaken because certification is often required before products can be sold or facilities can operate.

These qualities would normally support a premium public-market valuation. Intertek possesses international reach, technical barriers to entry, recurring customer relationships and exposure to structural regulatory growth. Yet the company’s share price before EQT’s approach remained sufficiently depressed for a private buyer to offer a large premium and still argue that attractive long-term returns were achievable.

That gap is central to the London market debate. Private equity firms are not charitable organisations offering generous prices to rescue disappointed shareholders. They pay premiums because they believe the acquired business can generate greater value under different ownership, financing and strategic conditions.

The implication is uncomfortable. When a company can be acquired at a 40% premium to its unaffected market value and still provide a credible private equity return, the public valuation may have been reflecting excessive scepticism, limited investor demand or insufficient recognition of future cash flows.

Intertek therefore represents more than a transaction. It illustrates how a high-quality British-listed company can appear fully valued to public investors and simultaneously undervalued to private capital.

What does EQT see in Intertek that London investors may have underestimated?

EQT is effectively buying a position inside the regulatory infrastructure of global commerce. Intertek tests whether products, components, facilities and manufacturing processes meet required standards. The company helps businesses demonstrate that goods are safe, compliant and suitable for sale across different jurisdictions.

This demand tends to rise as regulation expands. Electric vehicles require battery testing, charging-system certification and component assurance. Renewable-energy projects need inspection throughout construction and operation. Connected products create cybersecurity and data-protection requirements. Pharmaceutical, consumer and industrial companies must monitor increasingly fragmented supply chains.

Every new technical standard can create another commercial opportunity for testing companies. Every cross-border product launch can require additional verification. Every failure involving safety, quality or environmental performance can encourage regulators and customers to demand more assurance rather than less.

Public investors may have viewed Intertek primarily as a mature business-services company with steady but unspectacular growth. EQT can instead view it as a platform exposed to decades of increasing technical complexity.

Private ownership could also allow Intertek to invest more aggressively in acquisitions, digital systems and laboratory capabilities without having every expenditure immediately assessed against short-term earnings expectations. EQT has indicated that it plans to review the company’s portfolio, operations and research priorities after completion.

That review could lead to larger acquisitions, new technology investments or the sale of activities considered strategically peripheral. It may also revive the separation of Intertek’s Energy & Infrastructure operations from its Testing & Assurance businesses, an option the public company had already been evaluating.

The advantage for EQT is flexibility. It can change the portfolio, increase debt, accept temporary margin pressure and hold the investment through a multi-year transformation. Public-company management teams can pursue similar strategies, but they must explain every deviation from guidance to shareholders who may have very different investment horizons.

Why are strong London-listed companies increasingly vulnerable to takeover approaches?

London’s takeover vulnerability is partly a valuation problem and partly an ownership problem. United Kingdom equities have often traded at lower earnings multiples than comparable United States-listed companies, particularly in sectors associated with mature industrial, financial or consumer businesses.

The discount creates opportunities for buyers able to take a longer view. An international or private equity acquirer can pay above the prevailing share price while still purchasing the business at a valuation below what similar assets might command elsewhere.

Domestic pension funds and institutional investors have also reduced their exposure to United Kingdom-listed equities over several decades. This has weakened a traditional source of patient capital and reduced the depth of local demand supporting London valuations.

At the same time, global investors can access technology, healthcare and high-growth businesses through larger United States markets. London companies must compete for capital against companies offering stronger growth narratives, greater trading liquidity and more extensive analyst coverage.

Intertek sits awkwardly inside that environment. It is a globally relevant company with attractive margins, but it is neither a fashionable software stock nor a high-yield defensive utility. Its steady compound-growth model may be highly valuable over a decade while generating less excitement during a quarterly portfolio review.

Private equity is particularly effective at exploiting this type of neglect. Firms such as EQT can raise large pools of capital, combine equity with acquisition debt and make concentrated investments in businesses that public investors may consider too slow, too complex or insufficiently fashionable.

The result is a recurring pattern. A London company trades at a discount, management launches a restructuring plan, an external buyer offers a premium and shareholders face a choice between uncertain long-term upside and immediate cash.

The individual decision may be rational. The cumulative effect is a smaller and less diverse public market.

Does the Intertek premium prove the company was undervalued before EQT arrived?

A takeover premium alone does not prove that a company was mispriced. Buyers can overpay, market conditions can change and strategic investors may value assets differently because they expect synergies or operational improvements unavailable to existing shareholders.

However, the progression of EQT’s offers is revealing. Intertek rejected approaches of £51.50, £54 and £58 per share before agreeing to recommend the £60 cash offer combined with the retained final dividend.

The final proposal implies that EQT continued to see acceptable returns after increasing the price several times. The buyer also agreed to pay a substantial premium to the level at which Intertek had traded before the approach became public.

That does not necessarily mean the company should have traded at the offer price independently. The takeover value includes control of the business and the ability to change its capital structure, strategy and ownership model.

It does suggest that Intertek’s public valuation had not fully reflected the value EQT believed could be extracted through portfolio decisions, operational investment and private ownership.

Shareholders must now compare two different forms of value. The recommended offer provides a defined cash return and removes execution risk. Remaining independent could potentially produce greater long-term value through margin growth, acquisitions or a business separation, but it would also expose investors to economic weakness and strategy risk.

The Intertek board concluded that the guaranteed value was sufficiently attractive. That judgement may be commercially defensible while still raising broader questions about whether London’s valuation system is encouraging companies to disappear before their long-term potential is realised publicly.

Why can private equity take a longer view than many listed-market investors?

Private equity funds are structured around investment periods that can extend for several years. Once a company is acquired, the owner does not need to manage a continuously changing shareholder register or respond to daily share-price fluctuations.

This allows management to make decisions that may reduce earnings temporarily. Intertek could invest in new laboratories, integrate acquisitions, replace technology systems or reorganise divisions without needing to maintain a smooth quarterly performance narrative.

EQT can also concentrate governance. Instead of balancing the preferences of income investors, index funds, hedge funds and active institutions, the company will answer primarily to a controlling owner and its co-investors.

That concentration can accelerate decisions, although it also reduces the transparency and external accountability associated with public ownership. Private companies disclose less information, and minority public shareholders no longer participate directly in future value creation.

Debt is another important difference. Private equity buyers can use leverage to improve returns on invested equity, provided the acquired company generates sufficient cash. Intertek’s strong operating cash flow makes it suitable for this model.

Leverage can sharpen capital discipline, but it can also create pressure. If growth disappoints or borrowing costs remain high, debt repayments may compete with research, acquisitions and laboratory investment.

The private ownership model is therefore not automatically superior. It simply offers different tools and tolerates a different pattern of risk.

The concern for London is that these tools repeatedly allow private buyers to present higher immediate valuations than the public market. Each successful transaction reinforces the perception that the exchange is a place where companies can be purchased cheaply rather than funded ambitiously.

What could Intertek look like after a year under EQT ownership?

EQT has indicated that a strategic evaluation could take approximately 12 months after the acquisition becomes effective. The review is expected to examine Intertek’s operations, organisational structure, capital requirements, research programmes and acquisition opportunities.

The Energy & Infrastructure division could receive particular scrutiny. Intertek had considered separating this business from Testing & Assurance before accepting EQT’s proposal. A private owner could continue that process without the uncertainty of asking the public market to value two newly independent companies immediately.

EQT may also pursue larger acquisitions in specialised testing categories. Intertek has completed smaller transactions, but a private ownership structure backed by substantial capital could support more ambitious expansion.

Cybersecurity testing, connected-device assurance, battery safety, renewable infrastructure, pharmaceutical quality and artificial intelligence governance could all offer growth opportunities. These markets are technically complex and frequently affected by changing regulations, allowing companies with recognised expertise to build defensible positions.

Digital investment may become another priority. Intertek can use automation and artificial intelligence to improve laboratory scheduling, analyse test results, identify anomalies and accelerate customer reporting.

The risk is that efficiency programmes become overly focused on cost reduction. Assurance businesses depend on credibility, scientific expertise and independent judgement. Reducing technical staff or forcing excessive automation could undermine the very characteristics that make customers trust Intertek.

EQT must therefore create value through growth and productivity rather than financial engineering alone. The company’s reputation has been built over decades, while a serious quality failure could damage it quickly.

What does another FTSE 100 departure mean for London’s credibility as a global market?

One takeover does not determine the future of an exchange, but repeated departures influence how investors perceive it. A public market becomes more attractive when it offers a broad selection of growing, internationally relevant companies. It becomes less attractive when many of those companies are acquired before they reach their full potential.

Intertek would leave behind fewer listed options for investors seeking exposure to global testing, inspection and certification. London would lose a business benefiting from regulation, technological change and international supply-chain complexity.

The delisting would also reinforce concerns among potential initial public offering candidates. Entrepreneurs and private equity owners considering a London listing will look at the valuations achieved by existing companies. If established businesses trade at persistent discounts, new issuers may prefer other exchanges or remain private for longer.

This creates a circular problem. Weak valuations discourage listings, fewer listings reduce market diversity and reduced diversity makes the exchange less attractive to investors.

The problem cannot be solved by preventing shareholders from accepting premiums. Investors are entitled to choose immediate cash, and boards must evaluate offers based on their responsibility to shareholders.

A stronger response would involve increasing domestic equity investment, improving liquidity, attracting growth companies and creating conditions in which listed businesses can fund long-term strategies without being penalised for temporary investment.

London must compete not only with New York or European exchanges but also with private markets. The Intertek transaction demonstrates that private capital now has the size and confidence to acquire companies once considered too large to remove from the public market.

Could rejecting the EQT offer have produced more value for Intertek shareholders?

The answer depends on the timeframe. Over several years, Intertek might have delivered value exceeding the offer through earnings growth, acquisitions, higher margins and a successful separation of its businesses.

The company generated substantial operating cash flow and had a strong position in industries benefiting from regulatory growth. Its underlying investment case was not broken.

However, the standalone route involved uncertainty. A separation could have required significant costs, management attention and market support. The resulting businesses might have received higher valuations, but they could also have traded at persistent discounts.

Economic conditions represented another risk. Testing demand is relatively resilient, but Intertek remains exposed to industrial activity, consumer-product launches, energy investment and global trade.

The EQT offer crystallises value immediately and protects shareholders against those uncertainties. For investors with shorter horizons or concerns about London valuations, accepting the recommendation may appear logical.

Long-term shareholders may feel differently. They are being asked to surrender participation in a company that private equity evidently believes has substantial remaining potential.

This tension sits at the centre of many take-private deals. The premium rewards shareholders for giving up the future. Whether the payment is generous can be determined only by knowing what that future would otherwise have delivered.

What should investors watch before the proposed EQT takeover of Intertek completes?

The transaction still requires shareholder, court and regulatory approvals. It is expected to be implemented through a court-sanctioned scheme of arrangement and is targeted for completion during the fourth quarter of 2026 or the first quarter of 2027.

Intertek must continue operating independently until the deal becomes effective. Investors should watch whether trading remains consistent with expectations and whether any deterioration changes the perceived attractiveness of the offer.

Regulatory risk appears manageable because EQT is a financial buyer rather than a direct testing competitor. However, Intertek operates globally and provides services in sensitive industries, so foreign-investment and jurisdictional approvals remain relevant.

The financing structure also deserves attention. EQT and its partners will fund the transaction through equity commitments and debt. Intertek’s future investment capacity will partly depend on how aggressively the acquisition is leveraged.

A competing offer cannot be ruled out, although the transaction’s size limits the pool of potential bidders. EQT has described its financial terms as final except in circumstances permitted under takeover rules, including the emergence of another bidder.

Until completion, the share price will likely trade below the total offer value to reflect time, conditions and residual execution risk.

What are the key takeaways from the Intertek takeover feature?

• Intertek’s recommended EQT takeover highlights the persistent valuation gap affecting internationally diversified London-listed companies.
• The company is profitable, cash-generative and exposed to structural growth in testing, certification and regulatory assurance.
• EQT increased its offer several times, suggesting it continued to see attractive private-market returns at a substantial public-market premium.
• Shareholders receive valuation certainty but surrender participation in Intertek’s future growth and possible portfolio separation.
• Private ownership may allow larger acquisitions and longer-term investment without daily public-market pressure.
• Acquisition debt could improve EQT’s returns but may also compete with research, laboratory investment and growth spending.
• Intertek’s potential delisting would remove another differentiated FTSE 100 company from the London Stock Exchange.
• Repeated takeovers can weaken London’s sector diversity and make the exchange less attractive to future issuers.
• The deeper issue is not that shareholders accept premiums, but that public valuations repeatedly make those premiums commercially possible.
• The transaction remains proposed and subject to approvals, with completion expected in late 2026 or early 2027.