DCC Energy has agreed a £5.75 billion takeover by a consortium comprising private equity giant KKR and Energy Capital Partners, the latest in a series of London-listed firms being taken private.
Board backs improved offer
The FTSE 100 energy distributor, headquartered in Dublin, said its board supported a bid worth up to 6,796.22p in cash and dividend payments. Two previous proposals had been rejected. The final deal marks a slight improvement on the £5.7 billion proposal last month, which DCC had said it was “minded” to back.
Under the terms, the consortium will pay up to £1.25 per share upon the sale of DCC’s Nexora technology division for at least $800 million (£600 million), a move intended to sweeten the offer.
Rising interest and investor concerns
The agreed price is a steep rise on the initial £58 per share or £4.95 billion approach rejected in late April. DCC’s shares have risen 38% in the past six months amid takeover interest. However, reports indicate investor opposition, with major shareholders such as Aviva Investors and Fidelity International believed to consider the proposals undervalued.
DCC’s board stated: “Following a robust and lengthy negotiation with the consortium, the DCC Energy board considers that the acquisition provides shareholders with an attractive premium, cash certainty and value at a level above that which DCC Energy has been able to achieve consistently in the public markets.”
Growing trend of FTSE firms going private
DCC joins a growing list of FTSE companies acquired this year, including Mitie, Rotork, Intertek, Tate & Lyle, William Hill owner Evoke, and Beazley. easyJet is also facing a possible £5.7 billion takeover.
Mark Breuer, chairman of DCC Energy, said: “Whilst the DCC Energy board remains confident in the energy strategy and associated 2030 Ambition announced in 2022, the board believes the consortium’s offer represents a compelling opportunity for shareholders to crystallise value in cash at an attractive premium to DCC Energy’s historical trading price.” He added: “We are confident that the consortium will be strong stewards of DCC Energy’s 50-year heritage and support the business during its next phase of growth.”
