EQT's Intertek take-private draws £5bn in bank financing proposals

Banks are competing to put together debt packages worth about £5bn ($6.7bn) to fund EQT's potential take-private of Intertek, the British product-testing group, Bloomberg reported.

The financing would comprise a mix of leveraged loans and high-yield bonds, marking one of the larger buyout debt deals to reach the European market this year.

For EQT, the structure is designed to keep costs down. The debt is expected to be issued in both euros and dollars, letting the firm draw on several pools of investors and negotiate more favourable terms.

Morgan Stanley, which is advising EQT on the bid, is expected to help provide the financing alongside a number of other banks.

After a prolonged lull in dealmaking, lenders are sitting on pent-up cash and are keen to deploy it, handing borrowers the upper hand on pricing. A large, well-known take-private such as Intertek offers exactly the kind of lucrative mandate that Wall Street banks are eager to win, and the financing would join a growing pipeline of M&A debt deals.

The financing talks track the progress of the takeover itself. EQT bid £60 ($80) a share in cash for Intertek last month, valuing the London-listed company at about £9.2bn ($12.3bn). The firm has until an extended deadline of 18 June to announce a firm offer, having asked for more time to finish due diligence and governance work. Lining up committed debt now would leave EQT ready to move quickly should it decide to proceed.