KKR nears $7.6 billion take-private of DCC

The Irish energy distributor supports the revised takeover proposal, underscoring private equity's continued appetite for undervalued UK and Irish listed companies.

Irish energy distributor DCC has signaled its support for a sweetened GBP5.7 billion ($7.6 billion) takeover proposal from buyout firms KKR and Energy Capital Partners, bringing one of the largest potential European private equity deals of the year a step closer to completion.

The revised proposal values DCC at GBP65.25 per share in cash, in addition to the company's proposed final dividend of 147.22 pence per share, according to a recent Sky News report. The revised price represents a roughly 8.8% increase over Tuesday’s closing price.

DCC said it would be prepared to recommend the offer to shareholders if the consortium proceeds with a formal bid before the July 8 deadline. After that, the consortium would be forced to abandon its pursuit for six months under UK takeover rules.

The latest proposal follows months of discussions between the parties. In April, DCC rejected a GBP4.95 billion ($6.63 billion) offer worth GBP58 per share, arguing that the proposal significantly undervalued the company and its future prospects.

DCC is a company in flux, recently exiting its healthcare and technology divisions to focus on energy distribution, biofuels, and related infrastructure operations. The streamlined structure may have helped make the company more attractive to infrastructure-focused investors such as KKR and Energy Capital Partners.

The transaction also reflects a broader trend reshaping European public markets.

Private equity firms have increasingly targeted UK and Irish listed companies, arguing that public market valuations fail to reflect the value of underlying assets and cash flows.

DCC's initial rejection and the consortium's subsequent willingness to increase its offer illustrate the gap that often exists between public market valuations and what financial buyers are prepared to pay.

If completed, the deal would remove another sizeable company from public markets and reinforce a trend that has become increasingly common across the UK and Europe.

The consortium now faces the task of formalizing its proposal. Investors will be watching closely to see whether a definitive agreement is reached and whether competing bidders emerge for one of Europe's largest energy distribution businesses.

DCC’s stock was trading at GBP61.10 at 17:00 on Wednesday in London, up 1.8% from Tuesday’s closing price. The stock is up 32.2% year-to-date.

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