FTSE 100 firm agrees £5.7bn takeover in latest private equity swoop
FTSE 100 energy group DCC has agreed to a £5.75bn takeover by a group of private equity firms in another blow to the London Stock Exchange after a flurry of takeovers this year.
US private equity firm KKR and Energy Capital Partners, a subsidiary of London-listed Bridgepoint, said this morning they would pay a total of £65 per share in cash for the firm plus a final dividend of 147p per share.
The Dublin headquartered firm’s board had previously recommended a £5.7bn for the company but received pushback from several top 10 investors who warned the buyers were underpaying for the energy group.
The agreed deal comes at a 24 per cent premium to DCC’s undisturbed share price before the offer period began.
Founder ‘astonished’ by takeover
“Whilst the DCC Energy board remains confident in the energy strategy and associated 2030 Ambition announced in 2022, the board believes the Consortium’s offer represents a compelling opportunity for shareholders to crystallise value in cash at an attractive premium to DCC Energy’s historical trading price,” said Mark Breuer, Chair of DCC Energy.
The deal may yet face pushback when it is put to shareholders in September. Top investors including Aviva and Fidelity International had claimed the bid “significantly” undervalues the energy firm’s long-term prospects.
Jim Flavin, DCC’s retired founder and a top shareholder, said he was “astounded” by the board’s decision to recommend the private equity swoop.
“How a responsible board can put out an announcement which includes a dividend that was paid out last [week] is beyond me. Why would the board go along with such a charade? I regard this price as totally inadequate,” he said.
Dealmaking could reach £70bn
The deal is one of 11 worth over £1bn this year on the London Stock Exchange as private buyers pounce on cheap listed companies in London.
Mitie became the latest London-listed firm to confirm its exit from the public market last week, when the facilities management company accepted a £3.1bn offer from private equity-backed rival OCS.
On Wednesday, FTSE 100 real estate firm Segro said it was minded to accept a £14bn offer from US property rival Prologis.
The deals already in progress would amount to more than £69bn if they are all completed, according to AJ Bell, making 2026 the highest-value year for swoops on listed firms since the pandemic.
Shares in DCC rose by 1.1 per cent on Monday, to 6,355p.