Steinway Piano agrees to Paulson buyout

Posted by Reuters

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Paulson raises offer to $40/shr from $38

Offer values company at $512 million

Shares rise to $40.41 in premarket trading

Steinway says merger agreement does not provide for go-shop period

Aug 14 (Reuters) – Steinway Musical Instruments Inc, best known for its grand pianos, said it would be taken private by Paulson & Co Inc after the hedge fund firm raised its offer to $40 per share, valuing the 160-year old company at about $512 million.

Steinway’s shares rose to $40.41 in premarket trade, suggesting some investors expect a higher offer.

The company said on Monday it had received a bid of $38 per share from an unidentified asset manager that topped an offer of $35 per share from Kohlberg & Co. A source identified the new bidder as John Paulson’s hedge fund firm.

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