Steinway Musical Instruments proclaimed the hedge fund magnate John A. Paulson as its future new owner on Wednesday, after accepting his takeover bid of $40 a share.
But had things gone a different way, the famed piano maker may have been playing a different tune.
Steinway’s biggest shareholder, Samick Musical Instruments of South Korea, disclosed in a regulatory filing on Wednesday that it had also bid for the piano company, offering $39 a share.
That bid, made on Tuesday, trumped both the original $35-a-share takeover offer by the private equity firm Kohlberg & Company and a $38-a-share proposal by Paulson & Company. According to Samick’s filing, the South Korean company’s bid would have expired on Thursday at 5 p.m.
Helpfully, Samick also included a document outlining how its proposed deal â€" codenamed “Project Sonata†â€" would have worked. The Korea Development Bank, a major state-owned lender, had agreed to lend the instrument maker $200 million in term loans and $40 million under a revolving credit facility.
Keeping with the musical theme, Samick was code-named “Edelweiss†â€" presumably a reference to the song in “The Sound of Music†and meant to go along with Steinway’s ticker symbol, “LVB,†short for the German composer Ludwig van Beethoven.
Intriguingly, Samick disclosed in its regulatory filing that it had held discussions with Steinway about supporting a higher takeover bid by another suitor, but wasn’t able to strike an agreement.
Samick also reserved its right not to support a competing proposal by Samick or any other bidder.
In announcing its deal with Paulson & Company, Steinway said that it had the right to respond to certain unsolicited takeover bids and could even accept them, in exchange for paying the hedge fund manager $13.4 million.
Shares of Steinway surged past the Paulson offer price, reaching $41.31 a share. That suggests investors believe that a bidding war may still emerge.
