DCC shareholders oppose KKR-led £5.7bn takeover bid

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DCC shareholders oppose KKR bid

Highlights

Fidelity International, Aviva Investors, and Marathon Asset Management oppose KKR's revised £5.7bn takeover bid for DCC, citing inadequate valuation.
The updated offer totals £65.25 per share in cash plus a possible £1.25 tied to Nexora's sale, but major shareholders demand at least £70 in cash.
Shareholders argue the bid undervalues DCC's growth prospects and reflects broader concerns about UK-listed companies attracting full market value amid rising private equity activity.

Revised offer faces investor resistance

As reported by Financial Times, Fidelity International, Aviva Investors and Marathon Asset Management are opposing the latest proposal after the private equity consortium added a possible £1.25 a share in cash tied to the ongoing sale of DCC's technology arm, Nexora.

The base cash offer remains £65.25 per share, alongside a final dividend of £1.47. Several shareholders say that structure leaves the core valuation unchanged and does not adequately reward investors for DCC's long-term prospects.

Matt Bennison, head of UK active equities at Aviva Investors, said the earlier offers already significantly undervalued the business and that the latest increase is too modest to change that view. Alex Wright, UK equity portfolio manager at Fidelity International, said the fund group would not support the revised proposal and would not accept anything below £70 in cash per share.

Nick Longhurst, portfolio manager at Marathon Asset Management, said DCC still has strong long-term growth potential based on the energy distribution platform it has built in Europe and the U.S. He described the additional £1.25 as a minor adjustment that does not alter his position.

London market pressure and DCC outlook

DCC, which is listed in London and is part of the FTSE 100, provides off-grid energy solutions including liquid gas and also operates service stations and fleet services, mainly in Europe and the U.S. Shareholders opposing the bid argue that the company has further room to grow and that the consortium's terms do not capture that upside.

One shareholder said the better-than-expected performance of Nexora was one reason the original bid appeared ungenerous, because a stronger sale outcome could have left more value with the buyers. That investor said the conditional uplift now offered suggests the acquirers are not willing to raise the core price.

Jim Flavin, founder of DCC and a shareholder, said the revised terms change nothing in his assessment and called the proposal totally inadequate. DCC said its board has a duty to act in the best interests of shareholders, while the consortium does not immediately respond to a request for comment.

Any successful acquisition of DCC would mark another large departure from the London Stock Exchange, which is already facing defections to U.S. markets and private equity takeovers. That wider backdrop gives the bid added significance for UK capital markets as investors weigh whether listed groups can secure full value in public markets.

Our earlier article on the UK government’s push to revive London equity listings explained how ministers have been meeting major private equity firms to understand why portfolio companies are avoiding London despite recent market reforms. We also noted the debate over scrapping stamp duty on share purchases, as officials worry that more large companies could shift listings to New York and further deepen the City’s listings drought.

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