DCC founder attacks board over £5.7 billion takeover bid

Jim Flavin, the founder of DCC and its largest private shareholder, has attacked the company’s board for backing a £5.7 billion takeover bid from KKR and Energy Capital Partners, escalating pressure on the Dublin-listed group ahead of a deadline next week.

Flavin said the revised offer, which values DCC at £65.25 a share in cash plus £1.47 in dividends, was too low and that the company was worth closer to £100 a share. He said he wanted to stop the bid and had written to other interested parties.

DCC’s board had said it was minded to recommend the offer, but it has also said it must act in the best interests of shareholders. Flavin described that stance as very poor judgment.

Shareholder resistance

Flavin’s intervention adds to resistance already voiced by some of DCC’s biggest investors. Fidelity International, Aviva Investors and Ninety One have all publicly opposed the offer, arguing that it undervalues the energy group.

The bidder group, backed by KKR and Energy Capital Partners, increased its offer in June from an initial approach that was rebuffed. The revised terms came after the consortium first moved with a lower proposal in April, then lifted its bid to the current level.

What happens next

The consortium faces a deadline next week to formalize the offer or walk away, after the timetable was extended by one day on Wednesday, according to the Financial Times.

DCC, a Dublin-headquartered FTSE 100 group, has been refocusing on energy after selling other businesses. A completed deal would be another large exit from the London market.

For now, the key questions are whether KKR and Energy Capital Partners proceed, whether DCC’s board changes its position, and whether more shareholders or rival bidders emerge before the deadline.