Intertek’s takeover agreement is not just another private equity deal. It serves as a warning that UK stocks are being purchased because London looks too cheap.
The FTSE 100 testing and assurance group has accepted a significant takeover offer from the Swedish private equity firm EQT. This raises ongoing concerns in the City. Strong British companies are valued more highly by foreign buyers than by the London market itself. This is a serious issue. It questions the credibility of the UK stock market as a place for reputable public companies.
When a well-established business like Intertek can attract a multibillion-pound offer after years of frustrating valuations, investors should consider an uncomfortable question.
Is London failing to properly value its own companies?
Intertek Is the Latest London Exit
According to an announcement from the London Stock Exchange, the final EQT offer provides Intertek shareholders with a total value of £61.077 per share. This includes £60.00 per share in cash and the right to receive the FY25 final dividend of 107.7 pence per share.
The Times reported that the deal values Intertek at about £10.7 billion. If it goes through, the company will be the latest major blue-chip business to leave the London Stock Exchange. Intertek is not a speculative company or a distressed turnaround story. It is a long-established quality assurance, testing, inspection, and certification firm with roots that date back to Victorian marine surveying.
This is precisely why the deal matters.
Private equity usually favors businesses with predictable cash flow, strong market positions, and chances for operational improvements. Intertek fits that profile. The bigger issue is that EQT was willing to pay a significant premium for a company that public market investors had not fully recognized.
This pattern keeps repeating in London.
The Offer Was Not Accepted Easily
Intertek did not jump into EQT’s offer right away.
City A.M. reported that Intertek had turned down earlier offers of £51, £54, and £58 per share before considering the higher proposal. The company had also been looking into possibly separating its energy and infrastructure division, a move that some shareholders believed could increase value.
That is where the tension became clear. Was Intertek worth more as a separate entity, remaining public, or through a sale?
Some investors wanted to resist. City A.M. noted that Evenlode Investment and Marathon Asset Management opposed earlier offers, stating they did not fully recognize the value that could come from a potential spin-off.
Other shareholders wanted engagement. PrimeStone Capital, which owned about 0.5% of the company, urged Intertek’s board to provide an “attractive windfall to shareholders.” Matt Peltz of Lost Coast Collective was even more straightforward, saying it was time to acknowledge the benefits of EQT’s proposal and work cooperatively to finalize a deal, according to City A.M..
This division among investors tells the larger story. The board may have believed there was hidden value. Activists thought the market was not giving Intertek credit for it quickly enough.
Private equity stepped in to turn that frustration into a bid.
The Valuation Problem Is Bigger Than One Company
Morningstar UK analyst Ben Slupecki noted that Intertek’s acquisition price made sense but also highlighted the discount the market had placed on the business. In Morningstar UK’s analysis, Slupecki mentioned they previously saw Intertek shares as 23% undervalued before EQT’s initial proposal, due to the market undervaluing the strength of Intertek’s intangible assets and high customer switching costs.
That summarizes the London valuation problem.
If high-quality companies with strong brands, global customers, and stable revenue streams are not fully valued in public markets, buyers with long-term capital will continue to show interest. They can offer a premium, take the company private, and still believe they are getting a good deal.
The Financial Times characterized the Intertek deal as another significant private equity takeover of a UK-listed company at a time when low valuations make London-listed firms vulnerable. This vulnerability is becoming a recurring theme. British companies are not necessarily weak. Their public market valuations often are.
For hedge funds and large investors, this creates an opportunity. The question then becomes: which UK-listed company will be next?
Activists and Private Equity Are Reading the Same Signal
Intertek also illustrates how activist pressure and private equity interest can support one another.
Activists often seek companies where the market overlooks hidden value. Private equity looks for the same thing, but they have different goals. One pushes for strategic changes, while the other provides capital.
The Times reported that Intertek had faced pressure from shareholders including Lost Coast Collective, Palliser Capital, and PrimeStone Capital before agreeing to the deal. This matters because activism can compel boards to consider whether remaining independent in the public market is still the best option.
In a stronger valuation environment, Intertek might have had more flexibility to pursue a break-up, improve margins, or follow a long-term growth plan. In a weaker valuation environment, a cash premium becomes harder to turn down.
That is the challenge for London.
A company can argue it is worth more. But if the market refuses to pay that price, outside buyers will eventually step in.
London Needs More Than Pride
There is nothing wrong with foreign buyers wanting UK assets. The issue arises when too many valuable companies leave because the home market undervalues them.
Intertek’s sale should raise concerns in London. It indicates that public investors, boards, regulators, and policymakers have not yet resolved the gap between corporate quality and market valuation. If the London Stock Exchange wants to stay competitive, it needs more than speeches about reform. It requires deeper investment, stronger domestic demand, and a market culture that rewards long-term earnings potential.
Otherwise, UK stocks will keep getting acquired.
Intertek may be the latest deal, but it will not be the last if London continues to undervalue its best companies.
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