DCC Energy, a major energy business listed on the London Stock Exchange, has agreed to a £5.75 billion takeover by US private equity groups KKR and Energy Capital Partners. The company’s board recommended the offer, valuing the shares at £65.25 in cash, plus an additional £1.25 per share contingent on the sale of its technology division, Nexora, reaching a specified price threshold.
The proposed acquisition represents another significant departure of a major company from the LSE, following recent transactions involving Mitie, Tate & Lyle, Evoke, and others. The cash offer represents a 36% premium over DCC’s average share price during the three months preceding the public announcement of takeover negotiations.
Despite the board’s recommendation, the deal has faced considerable opposition from influential stakeholders. Jim Flavin, the company’s founder and a substantial shareholder, expressed strong disapproval of the transaction, stating he was “astounded” by the board’s decision. Flavin contended that the offer substantially undervalues the business, particularly given DCC’s 2022 strategic update that outlined targets to double operating profits to £830 million by 2030.
Major institutional investors, including Aviva Investors and Fidelity, have also voiced concerns about the valuation. Matt Bennison, head of UK active equities at Aviva Investors, characterized the offer as “a bad outcome for shareholders” and indicated that Aviva would not support the transaction. The board countered that the offer provides a “compelling and certain opportunity” for shareholders to realize cash value immediately.
Following the announcement, DCC shares increased modestly to £63.40, a gain of just under 1% from their prior closing level.
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