DCC Energy, a major energy business listed on the London Stock Exchange, has agreed to a takeover by a consortium of US private equity groups comprising KKR and Energy Capital Partners for approximately £5.75 billion. The company’s board has recommended the offer despite significant reservations from key stakeholders.
The proposed acquisition represents the latest in a series of UK-listed companies being taken private through private equity deals. Recent similar transactions include agreements involving Mitie, Tate & Lyle, and Evoke, while budget airline easyJet is currently subject to a competing proposal. The trend reflects a broader shift of major companies away from London Stock Exchange listings.
The takeover has generated substantial controversy among DCC’s principal shareholders. Founder Jim Flavin, who maintains a significant stake, has publicly criticized the board’s decision, characterizing the valuation as inadequate. Flavin expressed particular concern given the company’s strategic repositioning in 2022, which outlined plans to double operating profits to £830 million by 2030. Pension investment firms Aviva and Fidelity, which both hold major shareholdings, have similarly opposed the deal, with Aviva announcing it would not support the transaction.
The private equity consortium offered £65.25 per share in cash, representing a 36% premium over the company’s average share price during the three months preceding the public disclosure of takeover discussions. An additional £1.25 per share contingent payment would apply if the sale of DCC’s technology division, Nexora, achieves a specified valuation threshold. Despite these terms, the board’s characterization of the offer as providing a compelling opportunity to realize shareholder value has not persuaded major investors that the price reflects the company’s true worth.
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