Paulson to buy Steinway by the end of September
John Paulson looks set to acquire the American piano maker Steinway Musical Instruments. Earlier this week, Steinway announced it had received a $40-per-share bid, valuing its business at about £321m, which trumped an agreed $38 offer from the private equity firm Kohlberg & Co. Although the company did not name the bidder, the higher offer is understood to have been tabled by Mr Paulson’s Paulson & Co fund.
Steinway had given Kohlberg until today to come up with an improved bid matching or topping the higher offer. But in a regulatory filing yesterday, the private equity firm in effect walked away from the table.
Buying the 140 years old piano maker would be an unusual step for the hedge fund, which is best known for betting against toxic mortgages in the run-up to the recent housing crash. The deal is expected to close in late September.
According to Steinway.com, Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway in a Manhattan loft on Varick Street. Over the next thirty years, Henry and his sons, C. F. Theodore, Charles, Henry Jr., William, and Albert, developed the modern piano. They built their pianos one at a time, applying skills that were handed down from master to apprentice, generation after generation.
Steinway pianos have been used by legendary artists such as Cole Porter and Sergei Rachmaninoff and by contemporary ones like Chinese concert pianist Lang Lang.