(Sharecast News) - Intertek shot higher on Tuesday after Swedish private equity firm EQT lifted its takeover approach for the inspection, product testing and certification group to around £9.4bn.
EQT made a third and final offer for Intertek at £60 per share, up from £58 in cash. The PE firm noted that once the final dividend of 107.7p per share is included, the total value would be £61.077 per share.

The cash consideration represents a premium of 59% to the closing share price on 9 April, which was the day before EQT submitted its initial proposal to Intertek. EQT had previously offered £51.50 and £54.00 per share.

"EQT believes the final proposal delivers certain and accelerated cash value at a full valuation for Intertek shareholders, superior to the range of outcomes associated with Intertek's standalone prospects," it said. "EQT has submitted this final proposal with a view to progressing swiftly towards a recommended firm offer in the interests of Intertek shareholders."

Intertek said in a statement that it was reviewing the final proposal with its advisers and a further announcement will be made in due course.

"There can be no certainty that any offer will be made nor as to the terms on which any offer might be made," it said.

Under UK takeover rules, EQT has until 1700 BST on 14 May to either announce a firm intention to make an offer or walk away.

At 1305 BST, the shares were up 7.7% at 5,315p.

Shareholder Lost Coast Collective - an investment firm founded by Matthew Peltz, the son of billionaire activist investor Nelzon Peltz - urged Intertek to engage with EQT over the offer.

In a letter to the company's board of directors, Lost Collective, which owns a stake of about 1.2%, said the proposal represents "a superior risk-adjusted value for shareholders compared to the Company's plan, which involves significant execution risk".

Chief executive Matthew Peltz said the market appears to value Intertek's break-up plan in the mid-40s per share, as evidenced by the current 17% spread to EQT's offer.

"EQT, by contrast, is offering a concrete, all-cash bid of £60 per share, or £61.08 inclusive of the expected dividend. The EQT offer is clearly superior to the uncertainty, execution risk, and time involved in implementing the alternative plan," he wrote.

"The market has spoken. This management team and board have had their chance - over the last 11 years and during the last month. It is time to recognise the merits of EQT's proposal and engage in good faith to complete a transaction."

Intertek announced last month that it was considering splitting into two businesses. It launched a strategic review to evaluate the creation of two specialist businesses, Intertek Energy & Infrastructure and Intertek Testing & Assurance, either by demerger or a sale.

Late on Monday and before the latest offer from EQT emerged, activist investor Primestone Capital had also urged Intertek to engage with EQT about the potential takeover.

In an open letter, Primestone - which holds a 0.5% stake - said: "We urge the board to engage constructively with EQT, grant supervised due diligence access, and take a more realistic approach when assessing fair value.

"We believe EQT's latest proposal does not 'significantly undervalue' Intertek, whether judged against the company's standalone track record or the realistic outcome of the board's newly announced strategic review."

See latest RNS on Investegate

• News Channel