DCC’s largest shareholder, Fidelity International (FIL), has come out against an improved takeover proposal by two US private equity groups saying the £5.7 billion (€6.63 billion) pitch “still undervalues the company”. The Dublin-based, but London-listed company said on June 10th that the latest proposal – equating to £66.72, which marked a 15 per cent improvement from an initial one tabled in April – was of a level where the board “would be minded to recommend” to shareholders. The suitors, Energy Capital Partners and KKR, have until 5pm on July 8th to table a formal bid or firm intention to make a bid under a so-called “put up or shut up” deadline set by the Irish Takeover Panel. FIL funds own 6.9 per cent of DCC, making it the group’s largest shareholder. Shares in DCC dipped 0.4 per cent to £62.15 in London within minutes of FIL issuing its statement to a number of media organisations, including The Irish Times. “As things currently stand, we do not believe the revised proposal from the consortium adequately reflects our fair value of DCC and its long-term growth prospects,” said Alex Wright, portfolio manager of special situation and special values funds in FIL. “We therefore do not support the revised proposal and would not accept anything below £70 in cash per share.” Both the consortium’s proposal and FIL’s demand include the payment of a proposed £1.47 final dividend by DCC. [ DCC shares soar as US private equity firms increase bid to £5.7bnOpens in new window ]“DCC is a company I know very well, having first owned the stock in 2011. Today, it is the largest holding in my Special Situations and Special Values plc funds,” said Wright. “While the share price looks technically depressed, we believe this is for non-fundamental reasons.” He added: “What excites me today is its restructuring to an energy focused business, an area where they hold a strong track record of generating attractive returns on capital and growing through acquisitions. “Market sentiment has been weak, largely due to previous concerns around the structural decline of its fossil fuel distribution business. However, we believe these fears are overdone and the substitution effect is likely to be slower than expected. The current £66.72-a-share proposal is the latest of a “a series” that have been made by the consortium since DCC said at the end of April that it had rejected a £58-a-share bid as “fundamentally” undervaluing the company. Has the Irish building sector got themselves hooked on Government subsidies? Listen | 39:58Energy Capital is a specialist investor in the energy transition, specialising in electricity and sustainable infrastructure. KKR is one of the most storied New York investment groups – set up in 1976, the same year that DCC was founded, by Kohlberg, Kravis and Roberts – that pioneered the debt-fuelled corporate buyout industry.The approach in April followed years of underperformance by the stock relative to target prices set by analysts, leaving the company among the smallest on the FTSE 100 by market value earlier this year.DCC, whose businesses once spanned Robert Roberts tea and coffee to waste management, decided in late 2024 to abandon its conglomerate routes by putting its then healthcare division on the market and signalling a strategic review of its technology unit that would also eventually lead to it being put up for sale.DCC sold its healthcare unit a year ago to private equity fund-owned HealthCo Investment for an enterprise value of £1.05 billion. It also offloaded part of its technology business, with the remainder of that division currently on the market.“It remains DCC’s intention to have reached agreement for the sale of the business by the end of the calendar year 2026. The consortium is supportive of DCC’s intention to continue to pursue the technology disposal,” DCC said in the statement on Wednesday.Chief executive Donal Murphy and his team have long held that the energy business and related opportunity in energy transition presents the largest growth opportunity, at strong returns, available to the group.“The consolidating nature of the industry enables established players to maintain strong margins and deliver attractive returns. Meanwhile, DCC continues to scale its renewable energy activities, including solar installation and other energy efficiency solutions,” said Wright.