DCC Energy has received support from two major investor advisory firms for its planned sale to KKR and Energy Capital Partners, valued at €6.67 billion. This backing comes ahead of an important shareholder vote set for September 19. Institutional Shareholder Services (ISS) stated that the offer gives a fair premium and cash certainty. This is especially important since DCC's stock has struggled to reflect its strategic changes. ISS noted, "On balance, therefore, the offer provides a credible opportunity for shareholders to crystallise value today while avoiding these uncertainties."
Key Details
Glass Lewis, another advisory firm, recognized that some major investors, including Fidelity International and DCC's founder, Jim Flavin, oppose the bid. However, Glass Lewis pointed out that the offer is an attractive option. This is particularly true given DCC's difficulties in boosting its trading value. The advisory firm stressed that DCC has not received any competing offers.
Background
DCC's CEO, Donal Murphy, shared that the company initially turned down a €58-a-share offer from KKR and Energy Capital Partners in late April. After negotiations, DCC accepted a revised offer of £65.25 per share. There is also the potential for an extra £1.25 per share if its tech division, Nexora, sells for at least $800 million (€688.6 million). The Nexora unit has been on the market for several months.
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The result of the shareholder vote could affect DCC's stock price and investor sentiment in the energy sector. A successful sale may lead to increased cash flow for DCC, while a rejection could cause more volatility.
Investors will be watching the upcoming shareholder vote on September 19, which will decide the future of the proposed sale.
Based on reporting by: irishtimes.com