KKR Pulls Plan to Sell Shares as Second-Quarter Profit Falls
KKR Pulls Plan to Sell Shares as Second-Quarter Profit Falls
Nelson Ching/Bloomberg
Henry R. Kravis, founding partner of Kohlberg Kravis Roberts (KKR) & Co.
Henry R. Kravis, founding partner of Kohlberg Kravis Roberts (KKR) & Co. Photographer: Nelson Ching/Bloomberg
KKR & Co., the private-equity firm that listed its shares on the New York Stock Exchange last month, canceled a plan to raise $500 million in a stock sale.
KKR has applied to withdraw a registration for the planned sale, it said today in an e-mailed statement from New York. The firm reported a 29 percent decline in second-quarter economic net income as compensation costs rose.
KKR has declined almost 6 percent since it started trading in New York last month, as a slowing economy raised concern that earnings may decline. The firm, along with larger competitor Blackstone Group LP, is expanding its non-buyout businesses to capture more fees and cope with a smaller and less-profitable buyout market.
Economic net income, a measure of profit that excludes some costs, fell to $433.1 million in the second quarter from $613.5 million a year earlier on a pro forma basis, KKR said today. Fee-related earnings climbed to $63.3 million from $53.3 million.
KKR made the announcement after the end of trading in New York. The shares rose 0.3 percent to $9.89 today. KKR shifted its listing to New York from Amsterdam on July 15 after combining with its publicly traded European fund last year.
Founded by Henry Kravis and George Roberts in 1976, KKR has participated in several of the biggest buyout deals, such as the 2007 takeover of energy producer TXU Corp. for $43.2 billion including assumed debt.
Deals of that magnitude haven’t happened since the global credit crisis crippled financing markets for more than two years. KKR has sought to sell or take companies public to distribute profits to investors. The firm has sought listings for hospital operator HCA Inc. and retailer Toys “R” Us.
Kravis and Roberts have bulked up businesses that use the firm’s expertise, including a capital-markets unit to underwrite stock and debt offerings for companies it owns.
To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net
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