Steinway Musical Instruments Receives Higher Bid
Following the July 1 announcement that private equity investment firm Kohlberg & Company had offered to acquire Steinway Musical Instruments for $35 a share, Steinway has received a competing offer from an unnamed "affiliate of an investment firm with over $15 billion under management" for $38 a share, the company said today.
Steinway's board of directors says it has determined the new, higher offer of $38 a share constitutes a "superior proposal" and, in keeping with its prior agreement, has notified Kohlberg of the competing bid providing it the opportunity to adjust its offer. The new offer works out to about $477 million for the company, while Kohlberg & Co.'s offer worked out to about $438 million. Shares closed at $30.43 the trading day before that first offer was announced and are at $39.55 as of this writing.
Kohlberg, as part of its earlier agreement to acquire Steinway, has a three-business-day window in which to alter its original $35-a-share offer, which ends at the close of business on Aug. 14, according to Steinway. If negotiations with Kohlberg do not result in a suitable modified acquisition offer, Steinway expects to "terminate the Kohlberg Merger Agreement and related documents and to enter into the merger agreement relating to the Superior Proposal," the company said.
-- Material from The Associated Press was used in this report.
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