DEC. 15 | WOODWIND & BRASSWIND | BANKRUPTCY
Guitar Center Terminates WW&BW Bid
On Dec. 15, Guitar Center announced that its Nov. 22 agreement to purchase the assets of Woodwind & Brasswind had been terminated because the federal bankruptcy court had approved an alternative lead bidder, or stalking horse bidder, for the business. Guitar Center’s press release didn’t name the alternative lead bidder.
Given previous court documents, it’s likely the alternative lead bidder is Conn-Selmer (Steinway Musical Instruments), which bid $3.4 million more than Musician’s Friend on Dec. 1. (Guitar Center bid through its direct-response division). Conn-Selmer objected to Musician’s Friend’s bid on Dec. 5, stating that its bid was higher and on the table. It also said that Guitar Center’s $1.14 million break-up fee was too high. Based on these two factors, it urged the judge, in the best interest of the estate, to accept its bid as the stalking horse.
On Dec. 14, Musician’s Friend amended its purchase agreement, raising its deposit from $2 million to $5 million (Conn-Selmer’s deposit offer) and getting rid of the break-up fee, among other changes.
The new lead bid is still subject to auction, which the court has set for set Jan. 24, 2007.