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AUG. 22 I STEINWAY I LEGAL
Paulson & Co. to
Acquire Steinway

Steinway Musical Instruments has announced that entities affiliated with Paulson & Co. have entered into a definitive merger agreement to acquire Steinway in a transaction valued at approximately $512 million. Upon the completion, Steinway will become a privately held company.

On Aug. 13, Kohlberg & Company delivered notice to Steinway that it would not match the terms of Paulson's merger agreement. Steinway terminated its previously announced merger agreement with Kohlberg and will pay the firm a termination fee of roughly $6.7 million.

Under the terms of the Paulson Merger Agreement, an affiliate of Paulson is required to commence a tender offer to acquire all outstanding shares of Steinway's common stock for $40 per share in cash.

"Steinway has a 160-year history of manufacturing the highest quality pianos and musical instruments," said John Paulson, president of Paulson & Co. Inc. "The company's proven business model and highly skilled employees provide a strong foundation on which to expand. We fully intend to maintain the superb quality of Steinway's musical instruments, which are the finest in the world."

"[Steinway] conducted a comprehensive go-shop process resulting in Paulson's offer, which reflects the attractive value of the company's heritage and growth opportunities," said Michael Sweeney, chairman and CEO of Steinway. "At $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. He shares the company's commitment to the musical community and embraces our strategies to fully leverage our premier brands and extend our market leadership. We look forward to much success in this next chapter for Steinway."

The tender offer is required to commence within five business days and to remain open for at least 20 business days after launch. Any shares not tendered in the tender offer will be acquired in a second-step merger at the same cash price as paid in the tender offer.

steinway.com

 


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