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DCC, one of FTSE 100’s biggest energy firms, agrees £5.75bn takeover
DCC, one of the FTSE 100's largest energy firms, has agreed to a £5.75bn takeover by US private equity groups KKR and Energy Capital Partners, despite objections from its founder and biggest shareholders. The deal marks the latest in a wave of London Stock Exchange departures, following similar moves by Mitie, Tate & Lyle and Evoke, and comes as easyJet also faces a possible private equity offer, deepening concerns over the exodus of listed companies from the UK market.
DCC's board recommended the offer of £65.25 a share in cash, with a potential £1.25 sweetener tied to the sale price of its technology arm, Nexora — a total 36% premium on the company's average share price over the prior three months. Founder Jim Flavin, who remains a major shareholder, said he was "astounded" by the board's decision and branded the price "totally inadequate", while Aviva Investors and Fidelity, also significant shareholders, have voiced opposition. Aviva's Matt Bennison said the deal would be a "bad outcome for shareholders", though DCC's board maintains the offer gives investors a "compelling and certain opportunity" to realise value; shares rose just over 1% to £63.60 following the announcement.
In short
- DCC agrees £5.75bn private equity takeover by KKR and Energy Capital Partners
- Founder Jim Flavin and top shareholders Aviva, Fidelity oppose the deal
- Latest in a growing wave of firms leaving the London Stock Exchange
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The board's recommendation reflects a prudent assessment that £65.25 per share plus the Nexora sweetener represents fair value and certainty in an uncertain economic climate, delivering a substantial 36% premium to shareholders whilst providing professional private equity expertise and capital to develop the technology arm, which might be constrained by listed company pressures and conflicting stakeholder demands.
The case against
The minimal share price movement and vocal opposition from major shareholders including the founder reflect justified scepticism that the offer significantly undervalues DCC's growth potential and strategic assets, particularly Nexora, which could generate considerably greater returns if developed independently, representing a premature capitulation by the board that sacrifices long-term value creation for the false certainty of a near-term exit.
Explained simply
DCC is one of Britain's largest energy companies, listed on the London Stock Exchange. American investment firms KKR and Energy Capital Partners have agreed to buy it for £5.75bn, which would take it off the stock market. This deal is part of a growing trend of major UK-listed companies being taken private, raising questions about whether London remains an attractive home for large firms.
The company's founder Jim Flavin, who still owns a significant stake, opposes the deal and says the price being paid is too low. Other major shareholders, including investment firms Aviva and Fidelity, have also voiced concern about the offer. DCC's board, however, believes the deal provides shareholders with a good opportunity to realise the value of their investments.
This takeover follows departures of other major UK companies including Mitie, Tate & Lyle and Evoke, all of which have recently gone private. The airline easyJet is also reportedly facing interest from private equity buyers. These exits have prompted concerns about the future health and competitiveness of the London Stock Exchange.
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