KKR Nears Agreement to Buy Samson - KKR (NYSE:KKR)

Reports are circulating that a KKR

KKR

-led group is closing in on a deal to acquire the majority of Samson Investment for approximately $7 billion. The agreement to buy the family-owned oil and gas producer would exclude Samson's Gulf of Mexico operations.

Bloomberg

said that is has spoken to two people close to the deal, both of whom wish to remain anonymous for privacy reasons. Bloomberg reported that, “The deal would be the biggest corporate takeover by a private-equity firm this year, according to data compiled by Bloomberg. It would top the $5.7 billion takeover of Kinetic Concepts

KCI

, a maker of wound-care products and hospital beds, by a group led by Apax Partners LLP, completed earlier this month.” “Itochu will own 25 percent of the company buying the Samson assets while KKR will hold 60 percent, Reuters reported earlier today, citing unidentified people.”

ACTION ITEMS:

Bullish:

Traders who believe that KKR will benefit from the Samson acquisition might want to consider the following trades:

From 1992 to 2007, the company spent at least $885 million buying oil and natural-gas assets in the U.S. and Canada.

Bearish:

Traders who believe that it is not a big agreement may consider alternate positions:

Not getting the Gulf of Mexico division may end up hurting.

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