DCC PLC (LSE:DCC) rejected a takeover approach from private equity firms, but analysts say the interest underlines the group’s underlying value.
The company on Thursday turned down an indicative proposal from a consortium including Energy Capital Partners and KKR, stating it undervalued the business.
Broker commentary published ahead of the rejection had pointed to a reasonable chance of a deal.
RBC Capital Markets said DCC’s shift towards a pure-play energy business and relatively low valuation made it an attractive target, though it cautioned any offer might be limited to around 10% above the prevailing share price.
RBC raised its price target to 6,500p, based on a sum-of-the-parts valuation that still applied a discount to peers.
Jefferies also highlighted what it sees as underappreciated energy assets within DCC, arguing that simplification of the group and improved disclosure could drive a re-rating.
It said recent share price weakness linked to Middle East tensions may have prompted an opportunistic approach, with its 6,100p target implying scope for further upside even without a takeover premium.
While DCC has now rejected the proposal, analysts’ views suggest interest in the business may persist.