DCC accepts revised £5.7 billion KKR consortium takeover offer

Key Takeaways:

KKR-led consortium raises offer to 6,525 pence per DCC share
Revised £5.7 billion bid is 15% higher than April's rejected proposal
DCC extends formal offer deadline to July 8 for continued talks

DCC said it would recommend a £5.7 billion takeover offer from KKR and Energy Capital Partners at 6,525 pence a share, a 15% increase on an April bid the FTSE 100 company rejected.

"The DCC board has indicated it would be minded to recommend the revised proposal to shareholders," the company said in a statement Wednesday, adding that the offer represents "a compelling outcome for shareholders."

Under the terms, accepting shareholders would receive 6,525 pence in cash plus the proposed final dividend of 147.22 pence per share, valuing the total consideration at about 6,672 pence. That compares with DCC's closing price of 6,000 pence on Tuesday, representing an 8.8 percent premium to the undisturbed share price and roughly 11 percent above the stock's level before the initial approach in April.

The deal would rank among the largest UK takeovers this year and underscores private equity's growing appetite for energy infrastructure assets with stable cash flows. DCC, which distributes liquefied petroleum gas, fuel oils and other energy products across Europe, has been reshaping its portfolio through acquisitions and divestments to sharpen its focus on energy distribution.

DCC shares rose 125 pence, or 2.1 percent, to £61.25 in London trading Wednesday, extending their year-to-date gain to about 33 percent. The stock has climbed more than 11 percent since the original takeover approach became public in April, reflecting investor expectations that a higher bid would materialize.

The consortium, which includes KKR and Energy Capital Partners, first approached DCC in April with an offer of roughly £58 per share, valuing the company at about £4.95 billion. DCC's board unanimously rejected that bid, saying it failed to reflect the business's value and long-term prospects.

Under UK takeover rules, the consortium now has until July 8 to either submit a formal offer or walk away for six months. DCC said it agreed to extend the original deadline to allow the parties to continue discussions.

The transaction would require regulatory approvals, including clearance from competition authorities in the markets where DCC operates. The company, which employs about 13,000 people, serves customers across Ireland, the UK, mainland Europe and the US.

The revised bid comes as private equity firms increasingly target European distribution and infrastructure companies. Competitors such as Rubis and SHV Energy operate in similar segments, and the deal could trigger further consolidation in the sector.

This article is for informational purposes only and does not constitute investment advice.