Legendary piano maker Steinway has been taken over by US investment firm Paulson & Co. Founded by a German immigrant to the US, the company has struggled in US and European markets in recent years.
US investment firm Paulson & Co. has paid $40 (30 euros) per share to become the new owner of Steinway Musical Instruments. It values the deal at about $499 million. The company is to be taken private.
Steinway Chairman and CEO Michael Sweeney said Paulson's offer reflects the attractive value of Steinway's heritage and growth potential, while also providing its shareholders with significantly better returns.
The new owner of Steinway, John Paulson, scored billions in profits betting against subprime mortgage bonds before the financial crisis. He is known for investing in distressed companies, merger and acquisition deals, and other short to medium-term opportunities.
Paulson outbid investment firm Kohlberg and Co.'s earlier offer for Steinway. "At $5.00 per share more than the offer from Kohlberg, this transaction provides shareholders significant additional value for their investment," Sweeney said in a statement.
"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," Sweeney said.
Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway - who had anglicized his given name Heinrich Engelhard Steinweg - in a Manhattan loft. He was a master cabinet maker who built his first piano in the kitchen of his home in Germany, according to the company. In the following years, the company developed the modern concert grand piano.
The Steinway piano's quality of tone, sound and touch have made it the instrument of choice for the world's best pianists - from Arthur Rubinstein and Vladimir Horowitz to today's stars including Russia's Evgeny Kissin and China's Lang Lang.
While sales of Steinways, which can cost $200,000, have suffered in the US and Europe, they have continued to boom in Russia and China. Marketed in close association with Kissin and Lang Lang the pianos have become valued as luxury items indicative of wealth and social status, as much as for their musical qualities.
Shares in Steinway Musical Instruments jumped 7.9 percent, to $41.29 on news of the deal on Wednesday.
jm/ccp (Reuters, AP)