Permira, Cinven go Dutch on KKR Vendex stake

KKR has sold half of the 89 percent shareholding in Dutch retailer Royal Vendex that it acquired in July in a €1.5 billion PTP.

Global buyout house Kohlberg Kravis Roberts (KKR) has agreed to sell 44 percent of its equity holding in Dutch non-food retailer Royal Vendex to UK private equity firms Permira and Cinven, according to a report from Reuters.

KKR had acquired a 91 percent stake in Vendex in the Netherlands’ largest buyout to date when it led a consortium comprising Dutch private equity house AlpInvest in the €1.6 billion ($1.9 billion) public to private in July.

The VDXK Acquisition consortium originally comprised KKR, AlpInvest and Change Capital Partners, the private equity firm led by Luc Vandevelde, former chief executive of Marks & Spencer, which held a 20 percent stake.

Change Capital withdrew from the consortium in June on the basis that they weren’t prepared to make an unconditional offer for Vendex before 95 percent of the issued share capital of the company was secured. KKR took up Change Capital’s stake, bringing their allocation to just over 90 percent.

That allocation took KKR’s commitment to well over $1 billion, making it the firm’s largest investment since its ill-fated buyout of US food and tobacco company RJR Nabisco, according to Reuters.

KKR has acted swiftly to reduce its exposure in this case, selling 22 percent stakes to Permira and Cinven respectively. Although financial details of the transaction were not disclosed, the firms are reported to have committed around $200 million (€165 million), Reuters said.

This is not the first time this year that KKR has quickly realised part of an investment shortly after completion. In May, the firm struck a deal to sell more than half of its stake in PanAmSat, the US satellite operator it agreed to acquire in April for $3.55 billion to The Carlyle Group and Providence Equity Partners.

Following the sale, KKR will remain the largest shareholder with 45 percent of the equity, Permira and Cinven will have 22 percent stakes and AlpInvest will hold a 9 percent share. The remaining two percent is held by management.

Vendex is not the only Dutch retailer that has attracted Permira’s attention over the summer. Financial daily newspaper Expansion has reported that the buyout house is one of three private equity firms that have been shortlisted as potential buyers of the Spanish arm of Dutch retailer Ahold.

Permira, UK-based CVC Capital Partners and Vista Capital, controlled by Santander Central Hispano and Royal Bank of Scotland, are all reported to have submitted bids of around €600 million for Ahold’s 628 Spanish stores. A final decision is expected later in the year.