DCC Agrees to $5.75 Billion Sale to US Private Equity Firms
The FTSE 100 energy firm's board has accepted an improved offer from KKR and Energy Capital Partners, reflecting a persistent trend of foreign takeovers in the London market.
DCC Energy has agreed to a £5.75 billion sale to U.S. private equity firms KKR and Energy Capital Partners, marking another significant transaction in a wave of takeovers targeting London-listed companies. The deal, which represents an improvement on a previous £5.7 billion offer, was formally backed by DCC's board.
The energy distribution company stated that the agreed-upon price offers shareholders superior value compared to what could be achieved in the public markets. This development underscores concerns that the low valuations of some London-listed firms are making them attractive targets for foreign buyers.
This sale follows DCC's rejection of two earlier approaches, the first of which valued the company at £4.95 billion. DCC chairman Mark Breuer described the current agreement as a "compelling opportunity for shareholders to crystallize value in cash at an attractive premium to DCC Energy’s historical trading price." He also expressed confidence in the consortium as "strong stewards of DCC Energy’s 50-year heritage and support the business during its next phase of growth."
The agreement with KKR and Energy Capital Partners was reached after "a robust and lengthy negotiation," according to the company.
Shares in DCC saw a slight increase of 0.9 percent, or 55p, trading at 6,340p following the announcement.
DCC's agreement is the latest in a series of high-profile takeovers. Five FTSE 100 companies have now accepted takeover bids this year. These include warehouse and data centre giant Segro, lab testing firm Intertek, Lloyd's of London insurer Beazley, and financial services firm Schroders, all of which have attracted overseas buyers. Other UK-listed companies outside the top index that have been targeted include easyJet, Rotork, Mitie, and Tate & Lyle.
In parallel, UK software firm Pinewood Technologies indicated it has accepted a £545 million takeover offer from San Francisco-based buyout business Ridgeview. Shares in Pinewood Technologies surged by 32.7 percent, or 103p, to 418p after this announcement. However, this offer has reportedly met opposition from British investment firm Harwood Capital, which holds a 5.7 percent stake in Pinewood.
Separately, Serica has agreed to acquire fellow oil and gas firm Pharos Energy for £146 million.