DCC Energy has agreed a £5.75 billion takeover by a consortium of investors as swoops for London listed firms continue at pace.
FTSE 100 firm DCC, which is headquartered in Dublin, Ireland, said its board had given its backing to a bid from private equity giant KKR and Energy Capital Partners worth up to 6,796.22p in cash and dividend payments.
Two approaches were previously rejected and it marks a slight improvement on the £5.7 billion proposal put forward last month, which DCC had said it would be “minded” to back.
In the final agreed deal the consortium will also pay up to £1.25 a share upon the sale of DCC’s Nexora technology division for at least 800 million US dollars (£600 million) in a move to sweeten the offer.
It marks a steep rise on the initial £58 a share or £4.95 billion approach rejected by DCC in late April, with the energy distributor’s shares up by 38% in the past six months because of the takeover interest.
But reports have suggested investor opposition over the previous approaches, and major shareholders such as Aviva Investors and Fidelity International are said to believe the proposals undervalued DCC.
DCC’s board said: “Following a robust and lengthy negotiation with the consortium, the DCC Energy board considers that the acquisition provides shareholders with an attractive premium, cash certainty and value at a level above that which DCC Energy has been able to achieve consistently in the public markets.”
DCC joins an ever-growing list of FTSE companies to have been bought and taken private in recent months, with Mitie, Rotork, Intertek, Tate & Lyle, William Hill owner Evoke and Beazley having all agreed to deals that take them private this year, and easyJet also heading for a possible £5.7 billion takeover.
Mark Breuer, chairman of DCC Energy, said: “Whilst the DCC Energy board remains confident in the energy strategy and associated 2030 Ambition announced in 2022, the board believes the consortium’s offer represents a compelling opportunity for shareholders to crystallise value in cash at an attractive premium to DCC Energy’s historical trading price.
“We are confident that the consortium will be strong stewards of DCC Energy’s 50-year heritage and support the business during its next phase of growth.”