Mexico Privcap Video: Energy Reform Fuels Mexican Investment Opportunities
June 24, 2009
New York, June 24, 2009 - KKR & Co. L.P. ("KKR") announced today that it has proposed to the independent directors of the general partner of KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE) revisions to the purchase and sale agreement, dated July 27, 2008, between KKR and KPE pursuant to which the businesses of KKR and KPE would be combined (the "Purchase Agreement").
Under the terms of the revised proposal, upon completion of the business combination, KPE would receive equity interests representing 30% of the outstanding equity in the combined business. The new proposal increases the amount of outstanding equity that KPE will receive in the combined company at closing from 21% to 30% and eliminates the use of non transferable contingent value interests, which 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. KKR executives will retain the remainder of the equity and, consistent with other publicly traded alternative asset managers, approximately 40% of the carried interest earned by the combined business is expected to be allocated to KKR executives.
In addition, under the revised proposal, KPE would retain its listing on Euronext Amsterdam following completion of the business combination, with KKR having the ability to seek a New York Stock Exchange ("NYSE") listing of the combined business in the future. If KKR does not seek a NYSE listing of the combined business 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.
Completion of the revised business combination transaction would be subject to the satisfaction of certain conditions, including the commencement of a consent solicitation and KPE unitholder approval. KKR has discussed its 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 on the terms set forth above. Such investors include, among others, Black River Asset Management LLC; Lexington Partners; Putnam Investments; RS Investments; and Templeton Global Advisors Limited and its affiliated investment managers operating under the name Franklin Templeton Investments.
KKR cautions the holders of KPE's common units and related depositary units and others considering trading in its securities that the independent directors of the general partner of KPE have not yet considered the proposal and no decisions have been made with respect to the proposal. There can be no assurance that the independent directors will support the proposal, or that the parties will agree to any revisions to the Purchase Agreement, or that any transaction will be approved by the holders of KPE's common units or consummated. KKR does not expect to disclose developments with respect to the proposal unless and until it is in a position to announce a definitive revised transaction or the proposal has been withdrawn.
Established in 1976, KKR is a leading global alternative asset manager. KKR's franchise is sponsoring and managing funds that make investments in private equity, fixed income and other assets in North America, Europe, Asia and the Middle East. Throughout its history, KKR has brought a long-term investment approach, focusing on working in partnership with management teams of its portfolio companies and investing for future competitiveness and growth. KKR has more than $35 billion in private equity assets under management and more than $12 billion in credit assets under management as of March 31, 2009 through various private and publicly traded funds and separately managed accounts. KKR also carries out capital markets activities through its broker-dealer subsidiaries. The Firm has offices in New York, Menlo Park, London, San Francisco, Hong Kong, Tokyo, Beijing, Houston, Washington, D.C., Sydney, Paris, Mumbai and Dubai. More information about KKR is available at: www.kkr.com.
This release may contain certain forward-looking statements with respect to the financial condition, results of operations, liquidity, investments, business, net asset value and prospects of KKR and the transaction with KPE. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future, and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. KKR does not undertake to update any of these forward-looking statements.
Peter McKillop/Kristi Huller at 212-750-8300 or firstname.lastname@example.org