KKR announced Sunday that it will go ahead with its long-delayed IPO but via a reverse merger that will prevent its partners from cashing out for a while. After the dismal performance of Blackstone, Fortress and Och-Ziff, we’re surprised KKR didn’t just drop its plans for an IPO.
Forbes: Kohlberg Kravis Roberts & Co. is reviving plans for a U.S. stock listing, but with a twist: Its partners will not be cashing out…
Blackstone’s IPO, which enabled top partners to cash out more than $4 billion of their own stakes, was at first lauded but quickly criticised, and prompted a backlash from members of Congress, who demanded changes to the tax treatment the private partnerships enjoyed. It was the biggest IPO in nearly five years, but clearly was a sign of the market peak. Shares of Blackstone, which debuted at $31 each, are now trading 49% lower. Still, top partners Steve Schwarzman and Pete Peterson, together, walked away with more than $2.6 billion in the deal…
KKR will be entering the public markets through an acquisition of an affiliate in Europe that is already listed on the Amsterdam exchange. That European fund will delist from Euronext and the refashioned KKR will emerge to list on the New York Stock Exchange. Just 21% of the firm will trade publicly and the remaining 79% will be held by partners, who are subject to lockup provisions.
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