Dublin-based DCC, a sales and distribution services group listed in London, became the target of a new trans-Atlantic bid on Wednesday, sending its shares soaring to the top of the FTSE 100.
Bid Details
The firm received an offer from US private equity house Kohlberg Kravis Roberts & Co (KKR), which partnered with Energy Capital Partners. DCC said it had received "an indicative cash proposal" and that it was "evaluating the proposal." The company did not disclose the price. Its shares rose 11% in mid-session trade to 5,985p, a four-year high. DCC's board is being advised by J.P. Morgan Cazenove and UBS.
DCC, active in the energy sector, is the fourth FTSE 100 member to receive a takeover approach this year, following Beazley, Schroders, and Intertek. The firm's market value is around £5 billion.
Market Impact
Russ Mould at AJ Bell said: "Even though the would-be buyers are yet to set a price tag for their target, the total value of bids on the table for listed UK companies is already £29.7bn this year. DCC would add more than £5 billion to that tally on its own, if Wednesday's share price gains are any guide." Under City rules, KKR and ECP have until 10 June to make a formal offer.
DCC describes itself as "a customer-focused energy business specialising in the sales, marketing and distribution of secure, cleaner and competitive energy solutions to commercial, industrial, domestic and transport customers." It has over 10 million customers and almost 12,000 employees.
Other Deal News
The approach was the second piece of deal news on Wednesday. Before market open, London-listed flavour and fragrance maker Treatt accepted a £183 million cash bid from German ingredients group Döhler. The cross-Channel bid was at 305p in cash, and Treatt's shares surged over 45% to 299p.
Mould added that the DCC bid "suggests that the UK equity market continues to offer value, judging by how prospective trade and financial buyers from home and abroad seem keen to snap up London-listed companies."
