A consortium led by KKR and Energy Capital Partners is moving forward with a $6.67 billion (€6.67bn) bid to acquire DCC, an Irish services firm specializing in energy sales and distribution across Europe and the US. This offer, amounting to £66.72 per share including a dividend, represents a 15% increase from their initial proposal and a 24% premium over DCC's closing stock price on April 28, the day before news of the interest became public. The board of DCC had indicated in June its preparedness to accept this latest offer, even though some large shareholders, including Aviva Investors and Fidelity International, have voiced concerns that the company is being undervalued.
Despite the pushback from these key investors, the consortium is proceeding with its bid ahead of a Wednesday deadline, although talks are still ongoing and could be subject to delays. DCC, which reported an operating profit of €634 million for the year ended March 31, has been undergoing a strategic transformation. The company has been divesting its healthcare and technology divisions to focus primarily on its energy business, with a proposed rebranding to DCC Energy plc. This strategic shift aims to nearly double its energy operating profit to around £830 million by 2030 through organic growth and acquisitions.
This potential sale of Dublin-headquartered DCC is significant as it marks the possible departure of one of the last Irish companies trading on the FTSE 100 index. KKR has been notably active in recent deals, including winning a bidding war for Spectris, a manufacturer of precision testing equipment, with a £1.2 billion offer last year. The KKR-led consortium's persistent pursuit of DCC highlights the ongoing interest in companies undergoing strategic refocusing, even in the face of investor skepticism regarding valuation.
