After witnessing a significant slump in its net income in the second quarter, private equity firm KKR announced not to move ahead with its planned public offer of $500m. It got listed with the New York stock Exchange a few days back. The trading started on July 15.
The IPO units closed at $10.20 on July 15, which closed at $9.89 on Monday trading.
No details were provided by the Company for its decision to withdraw the offer.
In the second quarter financial results, the KKR’s net income dropped 29.4% to $433m from last year’s figure of $613.5m. The fall in the income has caused due to the mismatched tradeoff between investments and profits and private equity portfolio bearing less net carried interest.
KKR said in a registration statement, "At this time, the registrant has selected not to proceed with the public offering due to unfavorable market conditions".
As per some sources, KKR has lost a wonderful opportunity, but they can exercise the offer at a later date.
But the Company’s shares are experiencing a decrease after it got listed in lieu of investor’s perception towards equity firms as proxy. Also, KKR failed to stay at par with its rival Blackstone, whose listings reached heights three years back. The latter’s market capitalization is two-folds the former’s. But, as per the second quarter results, KKR managed to perform well compared to Blackstone, which reported net earnings around $205m.
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