A new bid to buy a legendary piano maker could be music to the ears of its shareholders.
Steinway Musical Instruments Inc. said Monday that an investment firm has offered to pay $38 per share, or about $477 million, for the company. That tops an earlier bid of $438 million, from Kohlberg & Co.
The prospect of a bidding war sent Steinway shares up $3.08, or 8.5 percent, to $39.31 in late morning trading. The stock peaked at $39.44 earlier in the day, an all-time high.
The Waltham, Mass.-based company identified the new potential buyer only as an investment firm with more than $15 billion under management.
Steinway has been in business for 160 years. Its pianos have been a status symbol and a must-have luxury in concert halls for more than a century, but the storied company suffered during the recession. Sales have increased in the past few years, but have yet to return to their levels from before the downturn.
Analysts have said that the recovering economy, coupled with increased overseas demand from places like China, makes the company more attractive.
Its shares have recovered with the prospect of a buyout, rising 71 percent this year.
Steinway had agreed to sell itself to investment firm Kohlberg & Co. in July for $35 per share, or about $438 million.
Kohlberg has until Wednesday to negotiate with Steinway and lay out a better bid. Otherwise, the deal between it and Steinway will be terminated and the musical instruments maker will agree to be bought by the other firm.
The new bid is a 25 percent premium to Steinway's closing price just before Kohlberg's bid was announced.
Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway in a Manhattan loft on Manhattan. Steinway was a master cabinet maker who built his first piano in the kitchen of his home in Germany, according to the company website.
Over the next 30 years, Steinway and his sons developed the modern piano. The company's products now include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig snare drums and Steinway & Sons pianos.