- KKR offered to buy KFN in December in an all stock transaction. By all measures it appears that KKR is getting a bargain at the expense of KFN shareholders.
- The timing of KKR's offer was fortuitous. KKR shares had a great run and KFN was suffering from year-end selling. The net result was a depressed purchase price.
- Fair value is $14-15 per share or a conversion rate of .6. This is 10x forward earnings and a 20% premium to our estimate of KFN's true NAV.