KKR may reevaluate KPE takeover, values fall

By Megan Davies

NEW YORK (Reuters) - Kohlberg Kravis Roberts & Co's KKR.UL Amsterdam-listed fund, KPE, said on Monday KKR was reevaluating a deal to buy out the fund, throwing doubt on KKR's plans for a U.S. stock listing.

KKR's plans to become a publicly-traded company hinge on the deal to buy the fund and, if that transaction is scrapped, the listing would be thrown into question.

Since the plans were announced in July, the financial markets and global economies have deteriorated dramatically, making it far less attractive for a company to go public.

The private equity industry has been hit by the meltdown, which shut off the supply of leverage for new deals and made nearly impossible the sale of companies they already owned.

Buyout firms have been announcing year-end writedowns of the value of their portfolios as the markets plunge.

Euronext-listed KKR Private Equity Investors (KPE) (KKR.AS) reported a 50 percent drop in the value of its portfolio on Monday and KPE's shares fell 9 percent to $2.05.

KKR Financial Holdings LLC (KFN.N), a debt fund managed by KKR, plunged more than 30 percent to 75 cents after it said it would not pay a dividend for the fourth quarter and probably not for 2009.

KPE DEAL