Hedge funds and Private Equity - PES

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a total of €1 327 million. Since there was a positive cash flow, KKR was able to deal with the
planned debt servicing. The equity ratio was increased slightly to 9.8%. The number of branches,
which currently stands at 525, is to be increased to 800 by 2014.
2.3 Management policies and shareholder activism: stock option
programs, effects on board and CEO´s, management fees,
employee information
KKR has wielded considerably more influence than Doughty Hanson on the company’s internal
organization. It has removed board members and introduced an extensive reporting system
and now employs stringent targets to exert pressure at the operational level. Although the number
of branches has been increased by 10%, the manpower ceiling has been maintained, which
means that staff productivity has been considerably enhanced. The working week has been
lengthened from 37½ to 40 hours. The feeling among the workforce is that the company has lost
some of its corporate identity. KKR shows little willingness to share information with the works
council.
3. Exit or secondary LBO, IPO, listing
KKR is seeking to make its exit by floating the company. Initially, this was planned for 2009 at
the earliest. However, the investment firm is now talking about floating the company in 2007. If
this launch takes place, it would trigger the third radical change in the company’s shareholder
structure within five years.
References:
Finance 09/04, p. 28 f.; Wirtschaftwoche 02.09.04, p. 78; Börsenzeitung 14.10.04, p. 17; Frankfurter
Allgemeine Zeitung 02.05.05, p. 13; Handelsblatt 06.05.05, p. 3