KKR’s $2.3 Billion Deal Goes Bust

Four months after reaching an agreement, KKR has reportedly postponed its planned takeover of Hitachi Kokusai Electric. KKR planned to buy the Hitachi subsidiary for 2,503 yen per share, valuing the company at about $2.3 billion, but Hitachi Kokusai’s stock closed Wednesday at 2,894 yen per share; with KKR suddenly looking at a steep discount, a committee reporting to the Hitachi board was said to have pulled its support.

It’s believed KKR will mount a new offer for the Japan-based provider of chip-making equipment and video solutions, but the firm could also reportedly abandon its bid entirely.

Already an active investor in the region, KKR has amped up its interest in Asia during 2017. To date, more than 18% of the firm’s completed deals this year have taken place in the region, its highest percentage of the decade, per the PitchBook Platform. And earlier this year, KKR closed its latest Asia fund on $9.3 billion, the largest buyout vehicle ever raised in the region.

Seth Klarman: Investors Can No Longer Rely On Mean Reversion

Volatility"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More

Take a look at our previous KKR coverage.

Article by PitchBook