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Sunday, November 22, 
6:26 am

KKR takes wait and see approach to public listing

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Henry_Kravis.jpgKohlberg Kravis Roberts & Co. is putting plans to go public on ice. The private equity heavyweight said Monday morning that its plan to list on the New York Stock Exchange this year via a share swap with its publicly listed leveraged buyout fund would be delayed until next year.

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On July 28, KKR announced its intention to fold its Amsterdam-listed public LBO fund, KKR Private Equity Investors, into the KKR partnership by means of a share swap and then move the stock to the NYSE. The proposal replaced an earlier plan to raise $1.3 billion in a conventional initial public offering.

However, after a few months of watching investors punish shares of KKR's listed rivals and financial firms overall, the leveraged buyout firm run by Henry Kravis and George Roberts is thinking better of becoming a public company. Private equity firms have sat out much of the M&A activity caused by the market turmoil this year, as tight credit markets and the market's inability to find a bottom have kept them wary. Things have slowed so much at the high end of the marketplace that some of the likely deals are hostile takeovers of the beaten-down stocks of Blackstone Group LP or Fortress Fortress Investment Group LLC by their own management.

In a blog post last week on Portfolio, Blackstone's Steve Schwarzman was cited as saying "this kind of environment is tailor-made for making absolute fortunes in the private equity business," and Wes Edens, Fortress' CEO is already joking that if Fortress stock falls much further, to $1, he would institute a hostile takeover of his own company. - George White

See KKR press release
See post on Portofolio
See Dealscape post on PE/Banking M&A
See Dealscape post on KKR stock swap





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