Irish energy distributor DCC is reportedly set to accept a £5.7 billion ($7.64 billion) takeover proposal from a consortium consisting of KKR and Energy Capital Partners. This comes after DCC initially rejected an earlier offer, stating it undervalued the company. The revised proposal, accepted by DCC's board, is priced at 6,672.22 pence per share, comprising 6,525.00p in cash and a proposed final dividend of 147.22p.
Despite the board's recommendation, several major shareholders, including Fidelity International, Aviva Investors, and Marathon Asset Management, are opposing the sweetened bid. These investors argue that the £5.7 billion offer, which includes a base cash offer of £65.25 per share and a potential £1.25 per share tied to the sale of DCC's Nexora arm, still undervalues the company. Fidelity International, for instance, stated it would not accept anything below £70 in cash per share, emphasizing DCC's strong standalone growth prospects.
Shareholders contend that DCC's diverse business mix, including off-grid energy, service stations, and fleet services across Europe and the U.S., as well as Nexora's performance, justify a higher valuation. The resistance from key investors adds pressure to the potential buyout and highlights ongoing concerns within UK capital markets regarding valuations and private equity interest, especially as the London Stock Exchange faces increasing pressure from listings migrating to other markets and private equity buyouts.
