PrimeStone Calls for Constructive Intertek Board Response to EQT Takeover Bid
PrimeStone Urges Engagement with EQT Amid Takeover Bid
PrimeStone's Position and Recommendations
May 11 (Reuters) - Activist investor PrimeStone Capital on Monday urged Intertek's board to "engage constructively" with EQT, after the British company rejected a sweetened takeover proposal from the Swedish private equity firm.
PrimeStone, which says it owns about 0.5% of Intertek through the funds they advise, also urged Intertek in a letter to provide supervised due diligence access and take a more realistic approach when assessing the company's fair value.
EQT's Revised Proposal and Intertek's Strategic Review
PrimeStone said it believes EQT's latest proposal, revised for a third time, does not "significantly undervalue" Intertek, adding that it has doubts about the credibility of the British product testing firm's strategic review which could see the company split into two.
Board Response and Valuation Concerns
"The (Intertek) board's latest response does not, in our view, reflect the serious engagement that this approach merits," PrimeStone said in its letter, regarding the rejection of the 8.93 billion pound ($12.18 billion) or 59.1 pound apiece bid, adding that the "view that fair value is 65 pounds is therefore seems disconnected from reality".
Intertek's Rejection and Market Reactions
Intertek rejected EQT's sweetened bid last week, saying the bid undervalued the company, and carried high execution risk. It also said that it had already received an "encouraging level of interest" for its energy and infrastructure unit from undisclosed potential buyers.
Other Activist Investors Enter the Scene
Separately, Bloomberg News reported on Monday that another activist investor, Palliser Capital, had amassed an undisclosed stake in Intertek, as the company comes under increasing pressure to engage with EQT.
Reuters could not immediately verify the Bloomberg report.
Responses from Stakeholders
Palliser Capital declined to comment on the Bloomberg report, when contacted by Reuters. Intertek and EQT did not immediately respond.
Exchange Rate and Reporting Credits
($1 = 0.7332 pounds)
(Reporting by Chandni Shah in Bengaluru; Editing by Shailesh Kuber)
