KKR-Led Consortium Increases DCC Takeover Proposal to $7.9 Billion
Details and Implications of the Enhanced Takeover Bid
Overview of the Improved Proposal
July 16 (Reuters) - Ireland's DCC said on Thursday that a consortium comprising KKR and Energy Capital Partners had submitted an improved takeover proposal, valuing the energy distributor at £67.97 per share, or £5.81 billion ($7.86 billion).
Breakdown of Offer Components
The proposal retains a cash consideration of £65.25 per share, a proposed final dividend of £1.47 apiece included in an earlier offer and adds a potential payment of up to £1.25 linked to proceeds from the sale of DCC's Nexora technology unit.
Company Response and Next Steps
The company, which distributes liquid gas, biofuels, and renewable energy to businesses and households, did not say whether it is prepared to back the sweetened bid.
Takeover Panel Deadline Extension
It said the Irish takeover panel extended the deadline for the consortium to make a firm offer or walk away to July 27 following the revised bid.
Status of Due Diligence and Documentation
The consortium has completed due diligence and substantially agreed on deal documentation, the Irish company said, adding that the precise terms of the Nexora sale proceeds adjustment were yet to be agreed.
Background and Shareholder Reactions
Previous Offers and Company Position
In April, DCC rejected the consortium's initial £4.95 billion proposal, saying it undervalued the company. KKR and Energy Capital returned in June with an improved offer valuing DCC at £66.72 per share.
Shareholder Sentiment
DCC had indicated it would be willing to recommend the June offer to shareholders, but Bloomberg News reported on Tuesday that two of DCC's largest investors, Aviva Investors and Fidelity International, had opposed the deal.
Investor Responses
Aviva Investors and Fidelity International did not immediately respond to requests for comment on the latest offer.
Trading Update and Market Reaction
Operating Profit and Share Performance
In a separate trading update, DCC said operating profit from continuing operations was ahead of last year and in line with expectations for the first quarter.
Its shares, which have risen more than 7% since the consortium's first approach in April, were up 1% at £63.50 in early trading.
($1 = 0.7389 pounds)
(Reporting by Atharva Singh and Shashwat Awasthi in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise)
