3rd FTSE 100 Take-Private This Year|What Is PE Seeing That the Market Isnt?
London's Quiet Sell-Off
On Wednesday, Intertek's board said it was "minded to recommend" a £60-a-share offer from Swedish private equity firm EQT — a £10.6 billion bid that makes Intertek the third FTSE 100 company to accept a foreign takeover this year alone. The FTSE 100 itself closed the session with Intertek shares up sharply, a surface-level reading that suggests the market welcomed the premium. What that reading misses is the direction of the flow beneath it.
The session opened with the FTSE 100 gaining as Intertek surged more than 10% on the EQT news, lifting the index's headline number. Defence contractor Babcock also moved higher after reporting 10% organic revenue growth and a new £200 million share buyback, its nuclear division up 14% to £2.1 billion, riding the wartime economy. FTSE 250 housebuilder Vistry went the other direction — shares fell more than 10%, hitting their lowest level in nearly 15 years, after the company said first-half profits would be "significantly" lower and paused its buyback entirely to focus on debt reduction. UK gilt yields held near multi-decade highs as speculation over Keir Starmer's political future continued to weigh on government borrowing costs.
So the session's surface was: one big winner, one hard loser, a defence sector holding firm, and political noise on gilts. That framing is accurate. But the Intertek number sits differently from the rest of it, because the money that just paid a 30% premium to take Intertek out of the public market is not passive. It is making a directional bet — and the bet is not on today's FTSE level.
The Premium That Asks a Question
EQT is paying £60 a share for a laboratory testing and quality assurance business that had been rebuffing its approaches for months, through three separate bids. The final accepted offer values Intertek at roughly £10.6 billion. Private equity firms do not pay 30% premiums on a whim. That gap — between what public markets were willing to price Intertek at and what EQT was willing to pay — is the signal worth examining.
The Bloomberg analysis framed Wednesday's deal as the latest in a run of UK take-privates, with EQT's pending acquisition adding to a sequence that raises a pointed question: why are foreign buyers, particularly private equity, willing to pay premiums that London's own investors have been unwilling to sustain? The most obvious answer is currency — sterling's weakness since the Iran war began has made UK assets cheaper in dollar and euro terms. But currency alone does not explain why a Swedish buyout firm is specifically targeting a FTSE 100 testing company with global operations, or why the same pattern is showing up three times in a single year.
The mechanism is valuation compression. UK-listed companies have been trading at persistent discounts to their US and European peers for several years — a discount that widened further as gilts sold off and domestic political risk rose. Public market investors, uncertain about the UK's fiscal trajectory, have been pricing in a risk premium. Private equity, with a longer hold horizon and the ability to restructure capital away from public scrutiny, is pricing in the underlying cash flow instead. EQT is not buying UK political risk. It is buying Intertek's testing revenue, which is globally diversified, and shedding the London listing discount in the process.
That mechanism works cleanly — but it contains a condition that unsettles it. If PE is right that UK-listed companies are structurally undervalued, the natural outcome is more take-privates, more de-listings, and a FTSE that becomes smaller and less representative of the UK economy over time. And a shrinking, less liquid index creates its own discount — which invites more take-privates. The logic can feed itself.
What the Third Deal in a Year Means for the Fourth
The unresolved question from the Intertek deal is not whether EQT overpaid. It is whether the pace of take-privates is a signal of temporary dislocation or the beginning of a structural re-rating of where UK companies belong.
The historical parallel is the post-2016 wave of UK take-privates that followed the Brexit vote. Sterling fell sharply, UK assets cheapened in foreign currency terms, and international buyers — both strategic and financial — moved in. The FTSE 100 shed a series of familiar names over the following years. The parallel is not exact: today's pressure comes from a combination of the Iran war's energy shock, gilt volatility from political risk, and a domestic investment base that has been withdrawing from equities into bonds. But the structural logic is similar enough to be uncomfortable.
Wednesday's session offered a narrow cross-section of that logic in real time. Babcock's strong results came entirely from defence spending driven by war — revenue that exists because a conflict is ongoing, not because UK industry is generating organic private-sector demand. Vistry's price cuts and paused buyback reflect a housing market where buyers have stepped back, where affordability has tightened, and where the developer's own response is to slow construction. Neither story suggests a domestic growth engine. Both suggest an economy that is currently priced by external forces — the war, the gilt market, sterling — more than by its own momentum.
For the FTSE 100 take-private count to stop at three this year, one of two things needs to happen: either UK valuations recover enough to close the gap that PE is currently exploiting, or the political uncertainty suppressing gilt prices resolves in a way that allows domestic institutions to re-engage with equities. The benchmark to watch is the 30-year gilt yield, which Standard Life noted this week has reached valuations last seen this century. If that yield begins to compress — signalling that investors are returning to UK government debt — the risk premium on UK equities could follow. That is the recovery path.
The downside path runs the other direction. If Starmer's political position weakens further and gilt yields push higher still, the discount on UK-listed equities deepens, and the gap that EQT just paid a premium to close reopens immediately for the next potential target. JP Morgan's Jamie Dimon warned this week that the bank would reconsider its London headquarters plans if the UK turned "hostile" to financial institutions — a different kind of capital signal, but pointing in the same direction. The question the Intertek deal leaves open is whether this is a market correcting a temporary mispricing, or a market beginning to price something more durable about where London sits in the global capital stack.