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Private equity finds soft takeover targets in London – yet again | Nils Pratley
The Dublin-based energy group DCC has agreed to a £5.75bn takeover by private equity firms KKR and Energy Capital Partners (a Bridgepoint unit), despite vocal opposition from some shareholders who believe the offer undervalues the business. This makes DCC the fifth FTSE 100 company to be acquired or agree to be acquired so far this year, continuing a trend of London-listed firms falling to private equity bidders with seemingly little response from Westminster.
Dissenting investors, including Fidelity International and Aviva Investors, argued DCC was executing well on its 2022 strategy to double operating profits to £830m by 2030, with about 35% of that growth already achieved. Fidelity's Alex Wright had said he wouldn't accept less than £70 a share, citing strong returns on capital and growth potential, but the board settled for £65.25 a share (up from an initial £58) after citing a shrinking, more concentrated shareholder register and difficulty attracting new investors. Chief executive Donal Murphy expects most shareholders will vote in favour of the deal.
In short
- DCC Energy agrees £5.75bn takeover by KKR and Energy Capital Partners
- Fifth FTSE 100 takeover deal this year, despite shareholder objections
- Board cites £65.25/share offer as best available amid investor concentration concerns
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
DCC has executed well on its 2022 strategy with 35% of its profit-doubling target already achieved, demonstrating strong returns on capital and clear growth pathways to £830m operating profit by 2030. Shareholders reasonably argue that an offer of £65.25 materially undervalues a company with such demonstrated operational capability and realistic earnings prospects; a price nearer £70 would appropriately reflect the company's fundamental strength.
The case against
A concentrated and shrinking shareholder register has made it increasingly difficult for DCC to attract new investors as a public company, which is itself a market signal about realistic valuations outside private ownership. Private equity provides committed capital and operational expertise to execute the growth strategy unencumbered by quarterly earnings pressure and investor demands for immediate returns; the board's negotiation from an initial £58 to £65.25 reflects pragmatic assessment of the company's true market opportunity as a listed entity.
Explained simply
DCC is a Dublin-based energy company listed on the London Stock Exchange. The company has agreed to be acquired by two private equity firms, KKR and Energy Capital Partners, which will take it off the public market and restructure it for profit.
Some significant shareholders oppose the deal, arguing that the £65.25-per-share price undervalues the company given its prospects. They point to DCC's strategy to double operating profits by 2030, with roughly a third of that target already achieved. The board accepted the offer, citing the company's shrinking shareholder base and difficulty attracting new investors as a public company.
This is the fifth FTSE 100 company to be acquired by private equity in 2026. The frequency of such deals reflects growing interest from private equity in British public companies.