Steinway bought by hedge fund firm for $512m
Paulson & Co. Inc.’s price beats previous offer by Kohlberg & Co.
The historic musical instrumental company Steinway is to be sold for $512m (£330m) to hedge fund firm, Paulson & Co. Inc.
The offer from Paulson, which is owned by the investor John Paulson, beat a previous offer from Kohlberg & Co. Paulson offered $40 per share, trumping the $35 per share offer from Kohlberg.
Paulson himself owns three Steinway & Sons pianos, including the 6'11'' Model B grand piano, but is best known in the financial world for making his money betting against the subprime mortgages at the heart of the 2007 financial crisis.
In an interview with The New York Times, Paulson said: ‘I’ve always been enamoured with the product. You have Mercedes in cars, and top brands in every other area. But no one has such a high share of the high end.’
The sale is due to be finalised in September and follows a turbulent few years for the world-famous company, whose sales have been affected by the recession.
Steinway sold its Manhattan showroom earlier this year, bringing in $22.7m (£14.5m).
In a statement, Steinway’s chairman and CEO said: ‘A $5 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.’
Steinway could still accept a superior offer until the tender offer closes, but would have to pay a termination fee of $13.4m.