Union Group Opposes KKR Financial Plan

Apr 22 2014 | 12:20pm ET

Kohlberg Kravis Roberts’ plan to merge with its publicly-listed specialty finance company should be rejected, a union pension advisory has recommended.

CtW Investment Group said that the $2.6 billion stock deal is a bad one for shareholders of KKR Financial Holdings, which is run by KKR. The advisory argues that the price offered by the latter for the former is too low, and that the “close ties” between the two companies made it impossible to come to a fair price.

“This deal’s low valuation and lackluster negotiation process further demonstrate that KFN’s directors failed to discharge their fiduciary duties and adequately negotiate on behalf of KFN’s business shareholders,” CtW executive director Dieter Waizenegger wrote.

The group also alleges that KFN’s board “made no effort to pursue alternatives or solicit competing bids,” and criticized its decision to “forgo an auction process.”

Those concerns echo those of two major proxy advisories, Institutional Shareholder Services and Glass Lewis. Both of those groups still endorsed the deal.

It is unclear whether CtW’s opposition will mean much: Investors it advises own just 0.1% of KFN shares.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of