Thursday, 2 July 2015
Last updated 12 hours ago
Aug 15 2013 | 1:28pm ET
Legendary piano-maker Steinway Musical Instruments yesterday agreed to be acquired by hedge fund Paulson & Co. in a deal valued at more than $500 million.
Paulson will pay $40 per share for the Waltham, Mass.-based company, $5 per share more than was offered by private-equity firm Kohlberg & Co. and $2 per share more than its original offer. Kohlberg, which struck a deal for Steinway last month, dropped out of the bidding on Tuesday, the same day that Korea's Samick Musical Instruments, which owns 32% of Steinway's shares, offered $39 per share.
Steinway will not solicit any further bids, but said it would accept higher, unsolicited offers.
The deal marks the first time that Paulson & Co. has bought a company outright, and firm founder John Paulson, who owns three Steinway grand pianos, admitting that sentiment played a role in the deal.
"I've always been enamored with the product," Paulson told The New York Times. "You have Mercedes in cars, and top brands in every other area. But no one has such a high share of the high end."
"We're fortunate in this case that John is a personal fan of our product," Steinway CEO Michael Sweeney said. "His love for the instrument gives him the insight as to how we can build the business."
Paulson & Co. "does not plan to close, relocate or change any of the company's manufacturing operations, and intends to support" its expansion plans," Paulson said. The firm will pay for the company with about $200 million in cash, The Wall Street Journal reports.
May 27 2015 | 2:15pm ET
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