Summary
KKR & Co. Inc. (KKR) has filed an 8-K report on May 5, 2014, to announce the completion of its merger with KKR Financial Holdings LLC (KFN), which became effective on April 30, 2014. Under the terms of the merger, KFN shareholders received KKR common units in exchange for their KFN common shares, at a ratio of 0.51 KKR common units per KFN common share. Existing KFN stock options were cancelled as their exercise prices exceeded the value of the allocated KKR units. Restricted KFN shares were converted into KKR common units with the same terms. This transaction consolidates KFN's operations under KKR. Importantly, KFN's outstanding senior notes and preferred shares, totaling significant principal amounts, will remain as obligations of KFN and are non-recourse to the broader KKR entity. KKR also indicated that financial statements and pro forma information related to this acquisition will be filed at a later date, within 71 days of this report.
Key Highlights
- 1KKR successfully completed the merger with KKR Financial Holdings LLC (KFN) on April 30, 2014.
- 2KFN shareholders received 0.51 KKR common units for each KFN common share.
- 3KFN stock options were cancelled due to unfavorable exchange value in the merger.
- 4Restricted KFN shares were converted into KKR common units.
- 5Significant KFN debt obligations (senior notes, junior subordinated notes, preferred shares) remain outstanding as KFN liabilities and are non-recourse to KKR.
- 6KKR will file detailed financial statements and pro forma information related to the acquisition in a future amendment.
- 7The merger is expected to streamline KFN's operations under the KKR umbrella.