Grant Billings with his mentor, the late Henry Z. Steinway
It’s been surprising how much interest there is in the potential sale of Steinway Music Properties.
I’ve become accustomed to people asking me about Steinway & Sons pianos. There’s a fasciation with the instruments built by the 160-year-old manufacturer founded by German immigrants and still based in Queens, New York. It seems that there is still nothing that sparks the imagination and creativity quite like a Steinway & Sons piano.
Why this makes Steinway Music Instruments a company worthy of a bidding war is simple… customers are demanding more value, and Steinway & Sons, Boston, and Essex offer consumers the most for their money.
Recently, an investment firm offered to buy Steinway Musical Instruments, the NYSE traded company which also owns band instrument builder Conn Selmer, the online music website, ArkivMusic, and other musical instrument companies. That offer was topped by an even higher offer – nearly half a billion dollars – just this week. People I meet, pianists and regular fans alike, all want to know, “why the fight for Steinway & Sons?”
In fact, assuming the sale goes through, it will mark the fourth time in just over forty years that the company has been sold. Since 1972, whether as a result of new ownership or simply a continued dedication to always improving their pianos, their new pianos have only gotten better.
This makes Steinway & Sons worth every penny… and probably more. While low-quality piano sales are plummeting, middle- and high-end piano sales are increasing as today’s savvy consumers demand better quality. Because new Steinway & Sons pianos are now built to much higher standards and outperform any of their past instruments, new Steinway pianos offer unbeatable value to players and investors.
Until recently, those fascinated with the Steinway & Sons quality but interested in a more moderately priced piano might consider a used Steinway. This, coupled with the rise of the Internet age gave way to a seller’s market. The questionable restoring methods of unauthorized dealers and an influx of predatory online counterfeit Steinway sellers ready to take advantage of unsuspecting consumers forced buyers to be much more cautious. Today, the only safe way to purchase a used Steinway piano is directly from an authorized Steinway & Sons dealer.
Steinway Artists like Harry Connick Jr, Diana Krall, and Billy Joel (pictured) are unpaid ambassadors of the brand - performing and recording exclusively on the company's piano.
Two other increasingly popular options, which also increase the value of Steinway & Sons as a brand, are the Boston and Essex pianos. These instruments, designed by and built under the supervision of Steinway & Sons, offer price and quality conscious consumers everything they’re looking for; high-quality, lower-priced pianos backed by Steinway & Sons. Boston and Essex pianos also include the Steinway Promise, making Steinway & Sons the only manufacturer to guarantee the trade-in value of their pianos.
Why this makes Steinway Music Instruments a company worthy of a bidding war is simple. Piano sales are increasing, customers are demanding more value, and Steinway & Sons, Boston, and Essex brands – regardless of where they are actually built – offer consumers the most for their money.
All of Steinway’s piano brands keep getting better, making it a far stretch to assume that any buyer willing to pay nearly $500,000,000 for the famed instrument maker would mess with a good thing. The value in the investment is the fact that customers can count on Steinway & Sons continuing their relentless pursuit of improving the piano.
UPDATE
The winner emerged quickly. Today (8/13/2013), Paulson & Co. Inc. announced that they are very excited about the pending acquisition of Steinway Musical Instruments. John Paulson, president of the investment management firm, expressed that they “fully endorse management’s current strategy to grow” and added that he personally owns three Steinway grand pianos and intends to add a fourth soon.
“He loves the pianos.”
“We intend to champion each of the attributes that make Steinway a unique company: its highly trained and skilled employees, perfected manufacturing processes, unwavering commitment to quality, revered global brand name, and dedication to partners, customers, artists and music lover,” Paulson said.
The primary motivation for the purchase by Paulson, according to the New York Times, is simple, “he loves the pianos.”
The final offer of $40 per share values the company at $512 million. Still, Steinway is allowed to consider larger offers until the deal closes.
For customers, dealers, and music lovers, the future of Steinway Musical Instruments certainly sounds every bit as sweet as their pianos.
UPDATE 9/18/2013
Musical Merchandise Review magazine shared a very similar view…