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Steinway signs deal for Samick to take a larger stake, will boost Steinway's liquidity
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WALTHAM, Mass. - Steinway Musical Instruments Inc. said Thursday that it signed a deal for Samick Musical Instruments Co. to take a minority stake in the company, boosting Steinway's liquidity.
Steinway will make a private offering of 1.7 million shares of its common stock. The shares will be priced at $16 each, a 37 percent premium over Steinway's Oct. 28 stock price — which is when the companies set the purchase price.
Steinway plans to use the offering's approximately $27 million in proceeds to get rid of outstanding debt and for general corporate purposes.
Samick has the option to buy an additional 1.7 million shares in Steinway at the offering price by March 31, 2010. The company will hold 1.9 million shares of Steinway when including the offering. Samick's chairman, Jong Sup Kim, will also join Steinway's board, bringing its total to nine members.
Steinway Chairman Kyle Kirkland and CEO Dana Messina hold all of the company's Class A stock, giving them more than 80 percent of the shares' voting power.
Shares of Steinway added 72 cents, or 5.7 percent, to $13.40 in afternoon trading. The stock has traded between $6.83 and $22.94 over the past year.
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