Steinway Musical
Instruments, Inc. LVB, one of the world's leading manufacturers of
musical instruments, announced today the conclusion of its previously
announced evaluation of strategic alternatives.
In July 2011, after receiving an unsolicited proposal to acquire the Company's
band instrument division, Steinway's Board of Directors engaged Allen &
Company LLC to assist a Special Committee of the Board in evaluating the
proposal and other strategic alternatives available to the Company. As part of
that process, the Special Committee evaluated a wide range of alternatives to
enhance shareholder value, including a sale of the Company's band division and
a sale of the entire Company.
Over the course of the evaluation process, a broad range of domestic and
international industry participants and private equity sources were solicited.
The Special Committee had extensive discussions with several parties and
received several non-binding indications of interest related to the sale of
the Company. After careful consideration of the results of the process, the
Company's current business strategy, economic and marketplace considerations
and the recommendation of the Special Committee, the Board of Directors has
ended the strategic alternatives evaluation process.
The Company previously announced that it had reached an agreement in principle
to sell its band instrument division to an investor group led by two current
Board members: Dana Messina, former CEO, and John Stoner, Conn-Selmer
President. The Special Committee had extensive negotiations with this investor
group. Upon the recommendation of the Special Committee and in light of
current operating performance of the band division, the Board of Directors
concluded that entering into a definitive agreement on the terms negotiated
with the investor group would not be in the best interests of the Company's
shareholders at this time. Accordingly, the Company has terminated the
agreement in principle and all related discussions with the investor group.
Michael Sweeney, Chairman and CEO, commented, "The Special Committee, with
assistance from its financial and legal advisors, considered a number of
strategic alternatives. However, in the end, the Board of Directors concluded
that none of the alternatives presented generated shareholder value superior
to the value inherent in the Company's strategic plan. We will continue to
focus management's efforts on execution of that plan and we look forward to a
prosperous 2013."
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