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Sept 25 (Reuters) - Australian non-bank lender Pepper Group PEP.AX said on Monday U.S. private equity giant KKR KKR.N had offered to pay a fully franked special dividend of 10 cents on top of its previous A$3.60 per share takeover offer.
The offer is now at a 6.63 percent premium to Pepper's A$3.47 closing price as of Friday.
KKR Credit indicated that the amended proposal is the company's final offer, Pepper said in a statement.
Pepper recommends its shareholders to vote in favor of the amended offer from Red Hot Australia Bidco Pty Ltd, owned by KKR Credit Advisors (US) LLC, in the absence of a superior proposal.
The company disclosed in the statement that payment of the special dividend will not reduce the cash to be paid under the offer, which would open opportunities for KKR to enter Australia's A$1.7 trillion mortgage market.
While Pepper is seen exposed to a housing correction and its delinquency rates are already well above the major lenders at 1.6 percent, Australians are seen as good creditors who will cut back elsewhere to meet their mortgage payments. August, Pepper entered a scheme implementation deed with KKR-controlled bidders, which allowed shareholders to choose either A$3.60 a share cash payment, or shares in the bidding vehicle. meeting to approve the conditions under the amended proposal will be held on Nov. 15.