Dublin-based DCC Energy, a prominent member of the FTSE 100, has become the latest London-listed company to agree to a private equity takeover. The deal, valued at approximately £5.75 billion, or £65.25 per share, sees the energy transition firm acquired by a consortium comprising KKR and Energy Capital Partners, a unit of Bridgepoint. This acquisition marks the fifth completed or agreed takeover within London's leading index since the start of 2026, raising further questions about the depth and attractiveness of the UK's public markets.
The agreement was not without initial resistance from some significant shareholders. Fidelity International and Aviva Investors, alongside DCC's founder, expressed vocal opposition, arguing that the offer undervalued the company's prospects. They suggested a share price closer to £70, citing DCC's attractive returns on capital, potential for growth through acquisitions, pricing power in a consolidating market, and the scope to scale up its renewable energy activities. They also pointed to the company's progress on its eight-year strategy, adopted in 2022, to double operating profits to £830 million by 2030, with approximately 35% of this growth already achieved.
DCC management, however, defended their acceptance of the offer, stating it provided a "compelling and certain opportunity for DCC Energy shareholders to realise value in cash today." A key factor cited by the company was the increasing concentration of its shareholder register and a reduction in market participants engaging with its story. They suggested that "exposure to low-volume growth end markets," such as petrol stations and gas distribution, weighed on the perceived terminal value and, consequently, DCC Energy's trading multiple, making it difficult to attract new investors despite its growing clean energy services division.
The acquisition of DCC Energy follows closely on the heels of other significant takeovers, including warehouse landlord Segro, which was acquired by a larger US rival for £14 billion last week. Data from broker Peel Hunt indicates that since the beginning of 2023, there have been 154 bids for UK companies with a market value exceeding £100 million, amounting to £165 billion in stock market capitalisation. While not all these deals involve private equity, London has emerged as a particularly active hunting ground for buyout firms, contrasting sharply with a significant decline in new company listings on the London market.
This ongoing trend highlights a perceived disconnect between public market investors and private equity firms. The latter often demonstrate a willingness to take a far longer-term view of a company's prospects, especially those with a mix of established cash-generating assets and emerging growth opportunities, such as DCC Energy's blend of traditional fuel distribution and burgeoning clean energy services. The regularity of these takeovers continues to fuel concerns about the shrinking size and risk-taking capacity of the UK stock market.