Too much bang for a buck

Few could accuse Kohlberg Kravis Roberts of short-changing investors in its plans to merge with listed European vehicle KPE and float the combined company in New York. But that’s because the all-paper transaction is so devilishly hard to value. Take the “contingent value interest” KKR has offered KPE investors as part of the deal. This instrument kicks in if KKR’s relisted shares sell for less than $22.25 in three years. It then converts into extra shares, donated by KKR’s partners. The idea is...