KKR To Buy KKR Financial For $2.6 Bln In All-Stock Deal

(RTTNews) - Private equity firm Kohlberg Kravis Roberts & Co. L.P. (KKR) and specialty finance company KKR Financial Holdings LLC (KFN) said Monday that they have signed a definitive merger agreement whereby KKR will acquire KKR Financial through a stock-for-stock merger that values KKR Financial at $2.6 billion.

Currently, KKR Financial is externally managed by KKR. Under the agreement, KKR Financial shareholders will receive 0.51 common units of KKR for each common share of KKR Financial.

Based on KKR's closing price as of December 16, the exchange ratio equates to a value of $12.79 per common share of KKR Financial, implying a 35% premium to KKR Financial's closing price on December 16, or $2.6 billion in total common equity value.

The deal is expected t close in the first half of 2014.