DCC Energy, one of the largest FTSE 100 energy firms, agrees £5.75bn takeover
Irish-based energy company DCC Energy has agreed to a £5.75bn takeover by US private equity groups KKR and Energy Capital Partners, despite opposition from its founder and major shareholders.
One of the largest energy companies listed on the London Stock Exchange has agreed to a controversial £5.75bn takeover by private equity firms, adding to the growing exodus from the UK market. The US groups KKR and Energy Capital Partners are set to acquire DCC Energy after the company's board recommended the offer, despite misgivings from its founder and biggest shareholders.
The cash offer of £65.25 per share represents a 36% premium over the company's average share price in the three months before takeover talks became public. The bidders also agreed to add a contingent £1.25 per share sweetener if the ongoing sale of DCC's technology arm, Nexora, reaches a certain price.
Founder Jim Flavin, a major shareholder, said he was "astounded" by the board's backing, believing the price undervalues the off-grid energy supplier. He noted that after a 2022 strategy update aiming to double operating profits to £830m by 2030, the offer is "totally inadequate."
Pension firms Aviva and Fidelity, also significant shareholders, have voiced opposition. Matt Bennison, head of UK active equities at Aviva Investors, said the takeover would be "a bad outcome for shareholders" and that the increased offer remains insufficient.
DCC's board, however, argues the offer provides shareholders with a "compelling and certain opportunity" to realise value in cash immediately. Following the announcement, DCC shares edged up just over 1% to £63.60.
