LONDON — Facing mounting pressure from institutional shareholders, the board of Intertek Group Plc is reportedly weighing a fourth and final takeover bid from Swedish private equity firm EQT AB, which has promised to unlock immense value by drastically reducing the amount of rigorous testing the product-testing company actually performs.
The £9 billion FTSE 100 firm has spent the past week fielding demands from frustrated asset managers who argue that Intertek’s profit margins are being artificially depressed by its stubborn insistence on verifying that industrial equipment, consumer goods, and medical devices function correctly.
Shareholders have reportedly grown tired of watching the company waste valuable billable hours meticulously inspecting cargo ships, analyzing food safety, and checking children's toys for lead, rather than simply stamping a clipboard and collecting the standard consulting fee.
For too long, Intertek has allowed a bloated culture of meticulous, time-consuming safety verification to eat into our quarterly returns.
According to a pitch deck circulated among major shareholders, EQT plans to achieve a 40 percent reduction in operational overhead by replacing the firm's global network of state-of-the-art testing laboratories with a highly efficient automated email system that simply replies "Looks fine to us" to all multinational manufacturing clients.
Shares in Intertek surged 4 percent in morning trading on the prospect that the company might soon be freed from the exhausting, low-margin burden of empirical science. Analysts at Morgan Stanley issued a "buy" rating on the stock, noting that the global corporate demand for completely unverified safety certificates has never been stronger.