A consortium led by private equity firms KKR and Energy Capital Partners has increased its takeover proposal for Irish energy distribution group DCC for the second time in just over a month, valuing the company at up to £5.81bn ($7.9bn), according to a report by Reuters.
The revised proposal values DCC at up to £67.97 per share. It includes a cash payment of £65.25 per share, a potential final dividend of £1.47 already reflected in an earlier proposal, and an additional contingent payment of up to £1.25 per share if DCC completes the sale of its Nexora technology business for at least $800 million.
DCC said the consortium has completed due diligence and that the parties have substantially agreed the transaction documentation, although discussions continue over the mechanism governing the contingent payment linked to the potential Nexora disposal. The companies have until 27 July to reach a binding agreement under UK takeover rules.
The latest proposal follows an initial £4.95 billion approach in April that DCC rejected on valuation grounds. The consortium returned in June with an improved £66.72 per share offer, which the company indicated it would be prepared to recommend, subject to agreement on final terms.
DCC has been reshaping its portfolio through the disposal of non-core businesses as it sharpens its focus on its core energy distribution operations, which span liquid gas, biofuels and renewable energy across multiple international markets.
Despite the improved proposal, questions remain over whether the offer will satisfy all shareholders. Investors including Aviva Investors and Fidelity International have previously been reported as opposing the transaction, while analysts at RBC Capital Markets noted that the latest increase represents only a modest improvement and that part of the additional value depends on the successful sale of Nexora.
DCC’s shares rose during Thursday’s trading session but continued to trade below the headline offer value, suggesting investors remain uncertain that the current proposal will ultimately result in a completed transaction or could yet be increased further.
For KKR and Energy Capital Partners, the revised bid demonstrates their determination to secure the acquisition after completing detailed due diligence and advancing negotiations to the documentation stage. The transaction would add a major European energy distribution platform to the consortium’s infrastructure and energy investment portfolios, while highlighting continued private equity appetite for large-scale energy assets despite a more selective dealmaking environment.
