Irish energy distributor DCC weighs buyout bid, shares soar
DCC Considers Takeover Proposal Amid Market Reactions
By Ankita Bora and Yamini Kalia
April 29 (Reuters) - Irish Energy distributor DCC is reviewing a cash takeover proposal from a consortium comprising U.S. investment firms Energy Capital Partners and KKR, it said on Wednesday, sending its shares sharply higher.
London-listed DCC, which operates across Europe, North America and Asia, did not disclose the proposed offer price. KKR declined to comment.
Private Equity Interest in UK-Listed Companies
The takeover approach marks the latest private equity pursuit of a UK-listed company, as buyout firms continue to target British and Irish firms trading at relatively low valuations.
Market Response to Buyout News
Shares of the company, which distributes liquid gas, biofuels, and renewable energy to businesses and households, rose to as much as 62.65 pounds on the news, giving it a market value of about 5.35 billion pounds ($7.22 billion), according to Reuters calculations.
Strategic Focus and Recent Performance
DCC has been simplifying its operations and sharpening its focus on its core energy business by stepping up acquisitions in Europe's liquid gas markets and divesting non-core units such as healthcare and technology.
Its shares have risen 11% over the past year, but have underperformed the broader FTSE 100, which is up nearly 23% over the same period.
Valuation Concerns and Market Volatility
Frustrations About Its Valuation Discount
FRUSTRATIONS ABOUT ITS VALUATION DISCOUNT
"I think ultimately there will be a lot of shareholders who have been frustrated by the constant valuation discount on DCC shares whilst it's been on the market," Berenberg analyst James Bayliss told Reuters.
Energy Market Dynamics
DCC, which supplies mainly off‑grid customers through partnerships with refiners rather than producing energy itself, is also operating in a volatile energy market, where supply constraints due to the Iran war have heightened demand for alternative energy.
"If you think about the energy trilemma, it is about affordability, availability, and cleanliness of energy," Bayliss said, adding that DCC's services address all three, driving structural tailwinds across its customer base and demand at levels not seen for many years.
Future Outlook and Next Steps
Profit Forecast and Offer Deadline
In February, the Dublin-headquartered firm forecast robust profit growth for 2026.
The consortium has until June 10 to make a firm offer or walk away.
($1 = 0.7407 pounds)
(Reporting by Ankita Bora and Yamini Kalia in Bengaluru; Editing by Sumana Nandy, Rashmi Aich and Sharon Singleton)
