Steinway Musical Instruments Co. (LVB) announced this morning that it has received an offer to acquire the company for $38 per share in cash from an unnamed investment firm. The offer trumps a $35 per share offer from Kohlberg & Company.
Steinway’s original agreement with Kohlberg allowed for a 45-day “go-shop” period and the investment company now has until August 14 to match or beat the new offer. In its announcement of the higher bid, Steinway did not change its original recommendation to recommend the Kohlberg offer, but did say that if Kohlberg does not match the new offer then the original offer will no longer be considered a “Superior Proposal.”
The offer from Kohlberg and the higher offer announced today indicate that the luxury market continues to attract attention from private equity firms. Steinway’s pianos and other musical instruments are not cheap, and the company has seen sales boosts in Asia particularly. U.S. and European sales have been depressed.
Steinway shares are up nearly 70% in 2013, and shares have jumped 8.5% just today to $39.32, after posting a new intra-day high of $39.44. The 52-week low is $20.61. The jump past the new offer indicates that investors think a bidding war might be about to start.