Private equity firm Kohlberg Kravis Roberts plans move to NYSE

KKR to list shares on NYSE

NEW YORK — KKR & Co. LP, the parent of private equity firm Kohlberg Kravis Roberts said Friday that it plans to list its shares on the New York Stock Exchange.

KKR originally sought a public listing in the U.S. in July 2007, hoping to raise up to $1.25 billion, after competitor Blackstone Group LP raised $4.1 billion in an initial public offering. KKR shelved that plan due to the financial crisis.

Instead, KKR merged with its European arm, now known as KKR Guernsey, and the combined company traded on the Euronext Amsterdam beginning in October 2009. When KKR begins trading on the NYSE, KKR Guernsey will be dissolved and cease to trade in Amsterdam.

KKR said in a filing with the Securities and Exchange Commission that it will register 204.9 million common units, worth about $2.21 billion, and that it will trade in the U.S. under the symbol “KKR.”

Guernsey stockholders will swap their shares for units in the U.S.-listed company. They will hold a 30 percent stake in the public KKR trading on the NYSE. At the end of 2009, there were about 2,000 KKR Guernsey unit holders.

The remaining 70 percent of the company will be owned by the senior executives who currently have a stake in the company. They own about 478.1 million common units, KKR said.

KKR’s plan sidesteps a public stock offering — at least for now — and allows it to avoid an ugly U.S. IPO market. Its move to the NYSE comes as Blackstone’s stock price languishes more than 50 percent below where it debuted, and companies trying to raise money through IPOs have had a tough time capturing investor interest.

Listing the shares in New York, even without raising capital, has a number of benefits. If the shares perform well, those market gains could help fund takeovers. Also, an NYSE listing would make it easier for founders Henry Kravis and George Roberts, who together hold a majority of shares with voting rights, to pare down their stakes because it’s much easier to buy and sell shares on the NYSE than on Amsterdam’s smaller exchange, said Steven Kaplan, a finance professor at the University of Chicago’s business school. Moreover, it’s more convenient for the company to pay employees in its principal office in New York with U.S.-listed shares, he said.

KKR buys companies and then sells them to the public or other investors. In November, it took discount retailer Dollar General Corp. public, although it retained a majority stake. In January, it acquired British pet retailer Pets At Home. Its holdings include retailer Toys ‘R’ Us Inc., hospital operator HCA Inc., mattress maker Sealy Corp. and software company SunGard Data Systems Inc.

At the end of 2009, KKR had assets under management of $52.2 billion, half of which was invested in North America.

A KKR spokesperson declined to say when shares could start trading in New York.

(This version corrects Blackstone IPO proceeds)