NEW YORK, July 26 (Reuters) - KKR Private Equity Investors LP's dollar-denominated shares are trading at a steep discount to its net asset value and could rise as it merges with Kohlberg Kravis Roberts & Co, Barron's said.
The shares trade at a 58 percent discount, the magazine said, adding that Mark Hake of Hake Investment Research thought 'a more normal discount' of 30 percent was 'probably appropriate.'
KPE's planned merger with KKR could add stability and give it a new source of income from fees, the magazine said.
The company may have also written down the worse performers in its portfolio, it said.
It might have also been more conservative in valuing holdings than rivals, Barron's added. The firm valued its stake in medical device company Biomet at 0.8 times cost late last year, while Blackstone Group did so at 0.9 times cost, Barron's said.
On Friday KPE launched a consent solicitation, seeking approval of its unit holders to proceed with the planned combination with KKR.
Combining the two firms is a roundabout way for KKR to gain a European listing, and is a step towards it following Blackstone in becoming a New York Stock Exchange-listed company.
(For more M&A news and our DealZone blog, go to http://www.reuters.com/deals) Keywords: KPE/ (paritosh.bansal@thomsonreuters.com +1 646 223 6113; Reuters Messaging: paritosh.bansal.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The shares trade at a 58 percent discount, the magazine said, adding that Mark Hake of Hake Investment Research thought 'a more normal discount' of 30 percent was 'probably appropriate.'
KPE's planned merger with KKR could add stability and give it a new source of income from fees, the magazine said.
The company may have also written down the worse performers in its portfolio, it said.
It might have also been more conservative in valuing holdings than rivals, Barron's added. The firm valued its stake in medical device company Biomet at 0.8 times cost late last year, while Blackstone Group did so at 0.9 times cost, Barron's said.
On Friday KPE launched a consent solicitation, seeking approval of its unit holders to proceed with the planned combination with KKR.
Combining the two firms is a roundabout way for KKR to gain a European listing, and is a step towards it following Blackstone in becoming a New York Stock Exchange-listed company.
(For more M&A news and our DealZone blog, go to http://www.reuters.com/deals) Keywords: KPE/ (paritosh.bansal@thomsonreuters.com +1 646 223 6113; Reuters Messaging: paritosh.bansal.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.