JAN. 7 I STEINWAY I FINANCE
Steinway Rejects Bid to Sell Conn-Selmer
Following a 17-month strategic alternatives evaluation process, Steinway Musical Instruments has decided not to sell the Conn-Selmer Band & Orchestral division.
Steinway had been in prolonged negotiations to sell the division with an investor group lead by two of Steinway's board members — Dana Messina, former Steinway CEO, and John Stoner, president of Conn-Selmer. The company had reached an agreement in principle with that group approximately a year ago before convening a special committee to evaluate a variety of strategic options, including selling Conn-Selmer, and even selling Steinway as a whole.
“The special committee, with assistance from its financial and legal advisors, considered a number of strategic alternatives," said Michael Sweeney, chairman and CEO of Steinway, in a press release. "However, in the end, the board of directors concluded that none of the alternatives presented generated shareholder value superior to the value inherent in the company’s strategic plan. We will continue to focus management’s efforts on execution of that plan and we look forward to a prosperous 2013.”
During a conference call with investors, Sweeney noted that Conn-Selmer's cash flow and improving business operations were deciding factors in keeping the division.
"Taking into account the stable cash flow of our band business, and its better than budgeted results for 2012, the board concluded that continuing to run the business is a better alternative for shareholders than consummating a transaction on the terms negotiated with the investor group," he said.
In other news, Steinway also announced that it has not reached a definitive agreement in regard to the sale of Steinway Hall, its retail center on West 57th St. in New York. Steinway had entered into a 15-day exclusive agreement to negotiate a sale, but could not hammer out a deal. The company continues negotiations with the potential buyer, but now has also entered into discussions with other interested parties.