KKR Gets a Deal in Boosting Flagstar Stake

Times Staff and Wire Reports

Kohlberg, Kravis Roberts & Co. paid just a nickel a share to solidify its control of Flagstar Cos., the debt-burdened parent of the Denny's restaurant chain. A unit of Donaldson, Lufkin & Jenrette Inc. sold 3.03 million Flagstar shares to a KKR affiliate for $151,792, according to a filing with the Securities and Exchange Commission. DLJ representatives didn't have an immediate comment about why the New York-based investment firm sold Flagstar shares for such a bargain price. Based on the current price of $1.1875 a share, the holdings have a market value of about $3.6 million. Officials of Spartanburg, S.C.-based Flagstar declined to comment on the transaction. The transaction boosted New York-based KKR's stake in Flagstar to 54.2% from 47.1%. Flagstar shares rose 3.1 cents to close at $1.1875 on Nasdaq.

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