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Photo: Ben Hider/Getty Images

KKR on Friday disclosed a 6.3% stake in playpen operator Dave & Buster's (Nasdaq: PLAY), and said that it may engage with shareholders on transactions and changes to company management.

Why it matters: Big buyout firms have worked for years to become viewed as management friendly, eschewing hostile takeovers and explicit partnerships with activist investors. What KKR just announced feels like a significant divergence from that path.

  • Dave & Buster's shares are down 18.5% over the past year, closing Thursday at $42.04 for a market cap of around $1.28 billion.
  • KKR's filing sent shares up more than 11%, opening trading on Friday at $46.76.
  • Dave & Buster's, which was private-equity-owned before going public in 2014, also has nearly $1.9 billion of debt.

KKR formed a public equity strategy several years back, and reportedly earmarked more than $1 billion of its flagship buyout fund for the purpose of acquiring so-called "toehold" positions in listed companies.

  • However, the outside expectation was that these stakes would be smaller (toeholds are generally below 5%) and come without threats of hostility. Collaborative, not confrontational.
  • A source familiar with the situation tells me that KKR has a "good relationship" with management, and that the two sides have had "constructive dialog." The source adds that there is no internal talk of going hostile.
  • That may well be true, but it doesn't erase Friday morning's black-and-white threat to possibly pursue changes to Dave & Buster's management and its board of directors. If it looks like an activist and walks like an activist...

The bottom line: Certain activist firms have been encroaching on private equity's turf, moonlighting as buyout shops (hi Mr. Singer!) KKR looks to be returning the favor, although it's unclear how such efforts will impact its core, "management-friendly" business.

Go deeper: Private equity firms fear a Democrat topping Trump in 2020

Go deeper

Biden calls Fox News reporter a "stupid son of a b---h" on hot mic

President Biden blasted Fox News' Peter Doocy on Monday after the reporter asked if the nation's soaring inflation is a political liability, saying, "what a stupid son of a b----h."

Driving the news: The Biden administration has faced rising inflation rates over recent months, which it has labeled as "transitory."

Hope King, author of Closer
1 hour ago - Economy & Business

Investors reset their compass

Data: FactSet; Chart: Axios Visuals

The endpoints of a stimulus-fueled market are being defined.

Why it matters: Conditions that drove excess pricing in riskier assets are steadily being removed, and big swings in the market like those seen today are inevitable as investors try to adjust to the new landscape.

3 hours ago - World

Soldiers seize power in Burkina Faso as global coup surge continues

Mutinous soldiers in Burkina Faso declared on state television Monday that they had deposed the government, closed the borders and taken control of the country. President Roch Marc Christian Kaboré has reportedly been arrested.

The big picture: This would be the third successful military coup in west Africa in eight months, after juntas took power last year in Guinea and in neighboring Mali.