Key shareholders of DCC, including Fidelity International and Aviva Investors, are expressing strong opposition to a raised $5.7 billion takeover bid by private equity firms KKR and Energy Capital Partners. They argue that the offer of $65.25 per share plus dividends significantly undervalues the FTSE 100 energy services company. Despite DCC's board indicating a willingness to recommend this enhanced offer, major investors are calling for a higher valuation, citing DCC's robust growth prospects and attractive cash generation.
Fidelity International, DCC's largest shareholder with a 7.99% stake, through Alex Wright, stated that the revised offer does not reflect the company's fair value or long-term potential. Wright believes market concerns around fossil fuel distribution are exaggerated, presenting DCC as a compelling recovery opportunity. He has indicated that Fidelity would not support an offer below $70 per share. Aviva Investors, the seventh-largest shareholder with 2.15%, echoed these sentiments through Matt Bennison, calling the proposal a "significant undervaluation" and expressing disappointment if the board recommends it.
These shareholder objections put pressure on the private equity consortium to substantially improve their offer. The current bid, an increase from an initial $58 per share, was made just hours before a 'put-up or shut-up' deadline. The potential delisting of DCC from the London Stock Exchange, following other private equity buyouts and moves to U.S. exchanges, highlights a broader trend of public-to-private transactions and concerns that U.K. assets are being acquired too cheaply.
