Asset manager KKR & Co. L.P., Wednesday proposed to the independent directors of the general partner of KKR Private Equity Investors, L.P. revisions to the purchase and sale agreement of July 27, 2008, between KKR and KPE pursuant to which the businesses of KKR and KPE would be combined .
Earlier in July last year, KKR said it would buy KKR Private Equity Investors (KPE) that was listed on Euronext. The company would then be delisted and be launched as a combined company on the NYSE under the symbol "KKR" KKR.N.
As per the revised proposal, KPE would receive equity interests representing 30% of the outstanding equity in the combined business, given the businesses are combined.
The new proposal increases the amount of outstanding equity that KPE will receive in the combined company at closing from 21% to 30%, while eliminating the use of non transferable contingent value interests. This provided for the delivery of between 0% and 6% of additional equity in the combined business on the third anniversary of the closing date in certain circumstances.
The new proposal enables KPE to retain its listing on Euronext Amsterdam, rather than at New York.
KKR would be left with the ability to seek a New York Stock Exchange listing of the combined business in the future. However, if KKR does not seek a NYSE listing during the 12-month period following the closing date, KPE would have the right to cause the combined business to seek a NYSE listing at that time.
KKR has been trying to list its shares in New York for the past two years, after it first proposed an initial public offering in July 2007.
The remainder of the equity will be retained by KKR executives, consistent with other publicly traded alternative asset managers. The company also said around 40% of the carried interest earned by the combined business is expected to be allocated to KKR executives.
KKR has also said it has discussed the revised proposal with certain institutional investors and, in connection with such discussions, holders of approximately 44% of KPE's outstanding units have stated that they would consent to a revised transaction.
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