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DCC Energy agrees to £5.75bn private equity takeover despite dissent
The board recommended KKR and Energy Capital Partners' offer of £65.25 a share in cash, after adding a £1.25 per share sweetener tied to the Nexora sale price.
UK listed energy group DCC Energy has agreed to be taken private in a deal valued at about £5.75bn by US private equity groups KKR and Energy Capital Partners, according to the Guardian Business. The company’s board recommended the offer despite public misgivings from DCC’s founder and some of its largest shareholders, adding to a wider trend of UK firms being bought out.
DCC is headquartered in Dublin and supplies liquid gas and fuels in Europe and the US through operations including Flogas, a wholly owned subsidiary. Under the proposed terms, bidders would pay £65.25 a share in cash, alongside a £1.25 per share sweetener that is conditional on the ongoing sale of DCC’s technology arm, Nexora, reaching a certain price.
The Guardian Business reported that DCC’s founder Jim Flavin, a major shareholder, said he was astounded by the board’s backing, arguing the price undervalues the company after its updated 2022 strategy aimed to double operating profits to £830m by 2030.
While the cash offer represents a 36% premium versus DCC’s average share price over the three months before takeover talks became public, the deal has drawn opposition. Aviva and Fidelity, which also hold significant stakes, said the proposed offer would be a bad outcome for shareholders, with Aviva indicating it would not support the deal if the board recommends it.