WALTHAM, Mass., Aug. 14, 2013 /PRNewswire/ -- Steinway
Musical Instruments, Inc. ("Steinway" or the "Company") (NYSE: LVB)
and investment firm Paulson & Co. Inc. ("Paulson") today
announced that entities affiliated with Paulson and the Company
have entered into a definitive merger agreement (the "Paulson
Merger Agreement") for the acquisition of the Company in a
transaction valued at approximately $512
million. Upon the completion of the transaction, Steinway
will become a privately held company.
On August 13, 2013, Kohlberg &
Company delivered notice to Steinway that it would not match the
terms of the Paulson Merger Agreement. Subsequently, Steinway
terminated its previously announced merger agreement with Kohlberg
and will pay the firm a termination fee of approximately
$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 the Company's common stock for $40.00 per share in cash. The Company's Board of
Directors, representing all of the disinterested directors,
unanimously recommends that stockholders tender their shares in the
Paulson tender offer once it is launched.
John Paulson, President of
Paulson & Co. Inc., said, "Steinway has a 160-year
history of manufacturing the highest quality pianos and musical
instruments. 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."
Michael Sweeney, Chairman and CEO
of Steinway stated, "The Company conducted a comprehensive
"go-shop" process resulting in Paulson's offer, which reflects the
attractive value of the Company's heritage and growth
opportunities. At $5.00 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 be commenced within 5 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.
Closing of the tender offer is conditioned upon customary
closing conditions, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act and receipt of German antitrust approvals. The
offer is not subject to a financing condition. The transaction is
expected to close in late September.
The Paulson Merger Agreement does not provide for a "go-shop"
period, but the Company is permitted to respond to unsolicited
offers in certain circumstances, and ultimately, to accept a
Superior Proposal (as defined in the Paulson Merger Agreement)
until the closing of the tender offer, subject to payment of a
termination fee of approximately $13.4
million.
Allen & Company LLC is serving as financial advisor to the
Company in this transaction. Skadden, Arps, Slate, Meagher &
Flom LLP and Gibson, Dunn & Crutcher LLP are acting as legal
advisors to the Company. Akin Gump Strauss Hauer & Feld LLP is
acting as Paulson's legal advisor.
About Steinway Musical Instruments, Inc.
Steinway
Musical Instruments, Inc., through its Steinway and Conn-Selmer
divisions, is a global leader in the design, manufacture, marketing
and distribution of high quality musical instruments. These
products include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French
horns, Leblanc clarinets, King trombones, Ludwig snare drums and
Steinway & Sons pianos. Through its online music retailer,
ArkivMusic, the Company also produces and distributes classical
music recordings. For more information about Steinway Musical
Instruments, Inc. please visit the Company's website at
www.steinwaymusical.com.
About Paulson & Co. Inc.
Paulson & Co. Inc. is
an investment management firm with approximately US$18 billion in assets under management and has
offices in New York, London and Hong
Kong.
Notice to Investors
The Paulson tender offer for the outstanding common stock of the
Company referred to in this press release has not yet commenced.
This press release is neither an offer to purchase nor a
solicitation of an offer to sell any securities. The solicitation
and the offer to buy shares of the Company's common stock will be
made pursuant to an offer to purchase and related materials that
Paulson intends to file with the Securities and Exchange Commission
(the "SEC"). At the time the tender offer is commenced, Paulson
will file a Tender Offer Statement on Schedule TO with the SEC, and
thereafter the Company will file a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the tender offer. The
Tender Offer Statement (including an Offer to Purchase, a related
Letter of Transmittal and other offer documents) and the
Solicitation/Recommendation Statement on Schedule 14D-9 will
contain important information that should be read carefully and
considered before any decision is made with respect to the tender
offer. These materials will be sent free of charge to all
stockholders of the Company when available. In addition, all of
these materials (and all other materials filed by the Company with
the SEC) will be available at no charge from the SEC through its
website at www.sec.gov.
Cautionary Notice Regarding Forward-Looking
Statements
This press release contains forward-looking statements with
respect to the tender offer and related transactions, including the
benefits expected from the acquisition and the expected timing of
the completion of the transaction. When used in this press release,
the words "can," "will," "intends," "expects," "is expected,"
similar expressions and any other statements that are not
historical facts are intended to identify those assertions as
forward-looking statements. Such statements are based on a number
of assumptions that could ultimately prove inaccurate, and are
subject to a number of risk factors, including uncertainties
regarding the timing of the closing of the transaction,
uncertainties as to the number of stockholders of the Company who
may tender their stock in the tender offer, the possibility that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the transaction, and general economic and
business conditions. The Company does not assume any obligation to
update any forward-looking statement, whether as a result of new
information, future events or otherwise. Risk factors that could
cause actual results of the tender offer to differ materially
include the following: failure to obtain any regulatory approvals
or satisfy conditions to the transaction, the inability to obtain
adequate financing, the risk that the Company's businesses will
suffer due to uncertainty related to the transaction, the
competitive environment in our industry and competitive responses
to the transaction as well as risk factors set forth above. Further
information on factors that could affect the Company's financial
results is provided in documents filed by the Company with the SEC,
including the Company's recent filings on Form 10-Q and Form
10-K.
Company
Contact:
|
Investor Relations
Contact:
|
Julie A.
Theriault
|
Jody
Burfening
|
Steinway Musical
Instruments, Inc.
|
LHA
|
(781)
894-9770
|
(212)
838-3777
|
ir@steinwaymusical.com
|
jburfening@lhai.com
|
|
|
Paulson
Contact:
|
|
Dawn Dover
|
|
Kekst and
Company
|
|
(212)
521-4817
|
|
dawn-dover@kekst.com
|
|
SOURCE Steinway Musical Instruments, Inc.