Harley-Davidson Inc.’s stock soared this morning on rumors it would be a takeover target for private equity firm Kohlberg Kravis Roberts & Co. L.P.
Milwaukee-based Harley was trading at $51.17 this afternoon, up almost 13 percent today. Market information site TheFly.com reported traders were speculating about the potential takeover, which could have been driving the stock higher.
New York City-based private equity giant KKR’s portfolio already includes Milwaukee-based industrial flow control machinery manufacturer Gardner Denver and Appleton-based outdoor retailer Mills Fleet Farm.
Harley has struggled in recent quarters as it has come under increasing competition from Polaris Industries, which produces the Victory and Indian brands. Harley was able to increase its motorcycle sales by 1.4 percent in the first quarter, but that came at a cost. The company reported net income of $250.5 million, down 7 percent, as it increased investments in marketing and its Kansas City manufacturing facility.
A private equity takeover would transform Harley from a public company to a private one. Private equity firms in this case often accumulate enough stock to acquire the company against the wishes of management, usually through a tender offer or proxy fight, then alter its capital structure with the aim of improving profitability.
Harley chose not to discuss the situation.
“We don’t comment on market rumors or speculation,” said Maripat Blankenheim, a spokesperson for Harley.
KKR, which has completed some of the largest buyouts in history including RJR Nabisco in 1988, did not respond to a request for comment.
