DCC shareholders oppose sweetened £5.7bn takeover bid

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DCC shareholders oppose £5.7bn bid

Highlights

DCC shareholders including Fidelity International, Aviva Investors, and Marathon Asset Management oppose the sweetened £5.7bn takeover bid with its base £65.25 per share cash offer and £1.25 per share contingent on Nexora sale.
Key investors argue the revised structure undervalues DCC, with Fidelity stating it will not accept less than £70 in cash per share and citing strong standalone growth prospects.
The potential acquisition, if successful, would contribute to ongoing pressure on the London Stock Exchange amid increased listings migration, U.S. defections, and private equity buyouts.

Investor resistance to revised offer

As reported by Financial Times, Fidelity International, Aviva Investors and Marathon Asset Management are among the shareholders opposing the improved bid after the consortium added a potential £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 investors say that structure does not adequately reflect DCC’s standalone value or its longer-term growth prospects.

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

Marathon portfolio manager Nick Longhurst also says DCC retains strong long-term growth potential through its energy distribution platform in Europe and the U.S. DCC founder Jim Flavin similarly describes the revised proposal as inadequate and urges shareholders not to accept it.

Implications for DCC and London markets

DCC operates in off-grid energy, including liquid gas, and also runs service stations and fleet services, mainly in Europe and the U.S. Shareholders opposing the deal argue that the company’s business mix and the performance of Nexora support a higher valuation than the consortium is offering.

One shareholder says the small uplift linked to a higher Nexora sale price suggests the bidders are unwilling to improve the core terms of the offer. That concern reflects a broader view among investors that any upside from a stronger-than-expected technology sale should not mainly benefit the acquirers.

A successful takeover would mark another large departure from the London Stock Exchange at a time when UK capital markets are already facing listings pressure, defections to U.S. exchanges and private equity buyouts. DCC says 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.

Our earlier report examined the surge in overseas takeover bids for London-listed companies alongside persistently weak new listings, a gap that has intensified concerns about depressed UK equity valuations. We noted that this dynamic is feeding worries about policy uncertainty and fragile confidence in UK capital markets, with companies such as DCC cited among names drawing bidder interest.

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