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SEC filing reveals hot-and-heavy bidding for First Data

Kohlberg Kravis Roberts had to outdo two rivals

David Milstead, Rocky Mountain News

Published May 30, 2007 at midnight

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Kohlberg Kravis Roberts had to outbid two other buyout firms to acquire First Data - then had to wait as 45 other parties were given a chance to top its price.

The details of the deal are included in a new Securities and Exchange Commission filing Tuesday by First Data. Nancy Etheredge, First Data spokeswoman, declined to comment beyond the document.

The company said April 2 that KKR, as the legendary buyout firm is known, would pay $34 per share for the Greenwood Village-based money mover. The transaction will take private Colorado's most valuable public company.

But KKR initially hoped to pay a lesser price. First Data said Henry Kravis, a founding member of KKR, approached First Data director James Robinson III in late 2006 and asked whether the company would accept an offer between $30 and $32.

KKR bumped the price to the $32 to $33 range soon after. But when the First Data board convened in February, after retaining legal and financial help, it learned two more buyout firms were in the hunt.

First Data is not disclosing those firms, except to say they were two of the buyout firms "with the most financial capacity" - needed because of the $25 billion size of the First Data deal.

Bids came in March 21, with KKR offering $33.50 per share. The other two firms bid $30 and $32.25. The two runners-up told First Data they might pay more.

First Data's advisers then went to KKR and obtained a new bid of $34. Exclusive negotiations followed, and a merger agreement was struck April 1.

But First Data had a "go-shop" clause that allowed it to find another buyer.

Adviser Morgan Stanley contacted 45 companies, including 16 private equity firms. Of those, 10 expressed interest, and six, including the two losing bidders, received confidential information.

But none bid - leaving KKR the winner.

David Milstead is finance editor of the Rocky Mountain News. He can be reached at or 303-954-2648.