Buyout giant KKR says plans to list on NYSE

By Megan Davies

NEW YORK (Reuters) - Kohlberg Kravis Roberts & Co KKR.UL, one of the world's most powerful private equity firms, plans to brave the turbulent equity markets and list on the New York Stock Exchange this year, joining rival Blackstone in bringing the famously secretive industry into public view.

KKR, co-founded by "buyout king" Henry Kravis, said on Sunday it plans to go public through a complicated transaction that involves buying its publicly listed Amsterdam investment fund, delisting it from Amsterdam and relisting the new company in New York.

A listing could value the combined KKR and fund at $15 billion to $19 billion (7.5 billion to 9.6 billion pounds), and KKR itself at $12 billion to $15 billion, a source familiar with the situation said.

The move, however, comes amid a drought for the private equity industry's traditional business of leveraged buyouts. The mega-buyouts of the past few years dried up abruptly last summer, when the credit crunch shut off the cheap financing that sustained the multibillion dollar deals.

Blackstone Group LP (BX.N), which became the first big U.S. private equity firm to go public when it listed in June 2007, just before the credit crunch, has seen its earnings hit and its shares drop sharply from their $31 listing price. Shares closed Friday on the NYSE at $17.01.

KKR, which has investments in numerous household names such as Toys R Us, Sealy mattress maker and asset manager Legg Mason (LM.N), said adjusted economic net income for the first quarter of 2008 was a loss of $97 million, versus a $361 million profit a year ago.

That was partly due to a number of holdings that KKR has in publicly traded companies falling along with the turbulent markets, said a source familiar with the situation. Blackstone in May reported a first-quarter loss for the same reason -- it has to adjust the value of its investments every quarter for accounting purposes as if the assets were being sold that day.

KKR said a public listing would allow it to have a more permanent capital base, use stock to retain and attract staff and have a currency to make acquisitions.