<article>KKR &amp; Co LP has added a small sweetener to its bid for Australia&#8217;s Pepper Group, caving to a demand from the non-bank lender&#8217;s biggest shareholder and bringing the deal value to A$682 million ($543 million).</article>

KKR &amp; Co LP has added a small sweetener to its bid for Australia&#8217;s Pepper Group, caving to a demand from the non-bank lender&#8217;s biggest shareholder and bringing the deal value to A$682 million ($543 million).
With the new offer, which sent Pepper&#8217;s shares surging, the U.S. buyout firm gains a slice of Australia&#8217;s A$1.7 trillion mortgage market while investors will be able to cash in at a 42 percent premium to its IPO price two years earlier.
KKR announced a special dividend of 10 cents per share on Monday &#8211; appeasing Perpetual Investments Ltd, Pepper&#8217;s top shareholder with a 14.7 percent stake, which had said it was unhappy with the A$657 million offer the lender had agreed to in August.
&#8220;It&#8217;s clear we were vocal, that we felt the initial bid undervalued the company,&#8221; said Anthony Aboud, a portfolio manager at Perpetual.
&#8220;This has been a decent investment for us. KKR have got it at a decent price and we&#8217;ve been trying to get as much as we possibly could.&#8221;
Pepper shares rose 4.6 percent to A$3.66 by mid-session, just below the sweetened offer price of A$3.70. That compares with its 2015 IPO price of A$2.60.
Pepper&#8217;s loan book jumped 36 percent in 2016, compared with the banking sector&#8217;s 6.5 percent credit growth, as big banks backed off riskier lending in response to regulators&#8217; concerns about ballooning household debt.
Although the non-bank lender is seen as exposed to a possible housing correction, Australians are generally viewed as good creditors who will cut back elsewhere to meet their mortgage payments.
Pepper&#8217;s shareholders will vote on the increased offer at a meeting on Nov. 15.
<h4>Reuters</h4>

KKR & Co LP has added a small sweetener to its bid for Australia's Pepper Group, bringing the deal value to A$682 million ($543 million).

KKR lifts bid for Australia's Pepper to $543m to appease shareholder

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KKR lifts bid for Australia's Pepper to $543m to appease shareholder

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