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UK's Intertek Group 'Minded to Recommend' EQT's Final Takeover Bid

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UK's Intertek Group 'Minded to Recommend' EQT's Final Takeover Bid

Intertek Group (ITRK.L) is now likely to accept EQT's (EQT.ST) final takeover proposal after the Swedish private equity giant raised its bid once again following three previously rejected offers.

Following the news, Intertek shares gained nearly 7% in London as of midday Wednesday, while those of EQT were little changed in Stockholm.

Under the latest and improved bid, EQT, via its EQT X EUR SCSp and EQT X USD SCSp funds, offered Intertek shareholders 60 pounds sterling per share in cash, according to a Wednesday release. Prior to this, Intertek's board "unanimously and unequivocally" rejected EQT's earlier offers of 58 pounds per share, 54 pounds per share, and 51.50 pounds per share.

The UK-based quality assurance provider said its board "carefully evaluated" EQT's final conditional proposal after "significant" engagement with its shareholders, concluding that it would be "minded to recommend" the sweetened bid if a firm offer is made. Intertek will now grant EQT access to confirmatory due diligence and temporarily halt its ongoing strategic review.

Under the terms of the proposed deal, Intertek shareholders would receive and retain the recommended final dividend of up to 1.077 pounds per share for 2025 if approved at the group's May 20 annual general meeting.

"The strategic review announced by ITRK on April 14th has made a sale or breakup of the Intertek portfolio a live possibility. We see preserving the status quo as the least likely outcome of the review and think that a take-private, trade sale or demerger of the 'Energy & Infrastructure' (E&I) assets all potentially have their merits, though see a trade sale to a listed player as a lower probability given the heightened geopolitical uncertainty at present," analysts at RBC Capital Markets said in a note. "Against this uncertainty, we think it likely that ITRK investors would vote in favour of the EQT proposal in the event it moves to a firm offer."

EQT has until June 11 to announce a firm intention to make an offer for Intertek or withdraw its bid.

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