Investment firm Paulson has announced it will be acquiring piano maker Steinway Musical Instruments for $40 (£26) per share – valuing the company at around $512m.
On 13 August, Kohlberg & Company withdrew their offer for Steinway for $35 per share after Paulson made its rival bid. Steinway had already accepted the offer in July, and will have to pay Kohlberg a termination fee of around $6.7m.
John Paulson, president of Paulson, said:
Steinway has a 160-year history of manufacturing the highest quality pianos and musical instruments. The Company's proven business model and highly skilled employees provide a strong foundation on which to expand. We fully intend to maintain the superb quality of Steinway's musical instruments, which are the finest in the world.
Michael Sweeney, chairman and chief executive of Steinway, commented:
The Company conducted a comprehensive "go-shop" process resulting in Paulson's offer, which reflects the attractive value of the Company's heritage and growth opportunities. At $5.00 per share more than the offer from Kohlberg, this transaction provides shareholders significant additional value for their investment.
At the same time, our employees, dealers, artists, and customers can rest assured that Steinway will be in excellent hands under John Paulson's stewardship. He shares the Company's commitment to the musical community and embraces our strategies to fully leverage our premier brands and extend our market leadership. We look forward to much success in this next chapter for Steinway.
The tender offer will begin within 5 business days and remain open for at least 20 business days after launch. Any shares not tendered in the tender offer will be acquired in a second-step merger at the same cash price.