Irish energy distributor DCC has today rejected a £4.95 billion takeover proposal from a consortium comprising US investment firms KKR and Energy Capital Partners, saying it undervalued the company.
London-listed DCC's shares fell as much as 6.4% as it snubbed the cash proposal of £58 a share, closing 5.8% lower by the end of the day.
However that still represented a premium of 3.6% to DCC's closing price before the offer was made public on Wednesday.
KKR and Energy Capital Partners declined to comment. The consortium has until June 10 to make a firm offer or walk away.
The approach to Dublin-based DCC marks the latest private equity pursuit of a UK-listed company, with bidders attracted by firms' comparatively lower valuations.
FTSE 100 companies to attract takeover offers in the past few months include Beazley, Schroders and Intertek.
DCC, which distributes liquid gas, biofuels, and renewable energy to businesses and households, has been divesting non-core healthcare and technology assets to focus on its energy business. In February, the group forecast robust profit growth for 2026.
Berenberg analyst James Bayliss agreed the proposal undervalued DCC, calling the timing "heavily opportunistic", as DCC is still working through its simplification and has "yet to be rewarded" for it.
"I think for something to be amenable for shareholders and management, you'd need to see a significant uplift from the rejected price today," he said.
DCC shares have risen about 22% in the past year, including sharp gains yesterday following disclosure of the bid, leading to the stock marginally outperforming the FTSE 100.
RBC Capital Markets analyst Andrew Brooke said investors have been frustrated by DCC's share price performance, adding that the market has struggled to value its energy business.
"We think there is a good chance that a deal happens, but are not convinced it will be much more than 10% ahead of the current price," Brooke said.
