KKR IPO Postponement?

KKR is disputing a Times of London report that it has postponed its $1.25 billion IPO. Firm spokesman David Lilly emailed the following to Reuters: “As evidenced by the recent filing of an amendment to the registration statement, we are continuing to work on the IPO and have not postponed.”

What’s so odd about this exchange is that both the Times story and KKR’s response are based on the same faulty foundation: That the IPO postponement would be a major embarrassment to KKR.

The Times writes: “Postponing its IPO is the latest blow for KKR…” Issuers usually issue “no comment” on everything related to their IPO, so the very existence of KKR’s response seems to confirm that a postponement – which it denies – would indeed be a “blow.”

But what both sides are missing is that a postponement would be lauded in many quarters, including this one. I don’t know of any KKR limited partners pining for an IPO, particularly when it’s for such a paltry amount (relative to KKR’s overall capital under management). KKR would argue that it needs the $1.25 billion in order to launch new services, but that’s a canard. Sure $1.25 billion in public funding would make such initiatives easier, but wasn’t Blackstone able to do the same thing years before going public? And think of all the extra time and money spent on reporting…

Instead, the KKR IPO reads like a “Who’s is bigger” contest between Kravis and Schwartzman. And since we already know the winner, it would be pricing the IPO – rather than postponing it – that would be the real embarrassment to KKR.