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Steinway Update: Code Name “Edelweiss” Outbid by a True Piano Lover

The calculation was rather simple — Mr. Paulson loves Steinway’s pianos, so why not buy the whole company?

Back in July, equity firm Kohlberg & Company, reached an agreement with Steinway to buy the company for $35 a share ($485 million). But piano enthusiast and billionaire John Paulson, presumably after reading Piano Street’s post encouraging “others to make an offer”, began to pursue Steinway in earnest and read a book on the company to help bring himself up to speed.
After finishing the book, Paulson surprised everyone by offering $38 a share on August 14. Kohlberg bowed out of the running, but later that day, a secret challenger turned up under code name “Edelweiss” with a raised bid of $39 a share. Not to be outdone, Paulson increased his bid to $40. Steinway declared him the winner, and the identity of the secret bidder “Edelweiss” was revealed. It was Samick Musical Instruments of South Korea, one of Steinway’s biggest shareholders before the buyout. For terminating its prior agreement with Kohlberg, Steinway must now pay the company $6.7 million — just about the cost of 50 new Steinway D pianos.

The ownership change and it’s impact on the piano world

Steinway Musical Instruments will now change from being a publicly owned company traded on the stock market into a privately owned company. From a pianist’s point of view, the change of ownership for one of the leading instrumental manufacturers would not in itself be a concern as long as their focus remains unchanged. But running a company with such a strong historical tradition and with such a precious market position as Steinway’s is always a balancing act between maximizing profits versus preserving and developing tradition and art.
While Steinway pianos are most often extraordinary, many of their ancillary products such as Essex and Boston pianos, sheet music and apps are not exactly top notch. Those are chiefly designed to take advantage of Steinway’s brand recognition — obviously a strategy suitable for a publicly traded company in the struggle of regularly delivering good profits to its shareholders. Here, private ownership could provide a better opportunity to maintain quality by focusing on long term development of their main product.

So what is Paulson’s plan?

Piano Street got access to a document on US Securities and Exchange Comissions. Judging from that letter pianists can rest assured the company will be in good hands.

“We will proudly support the company’s legacy as the premier global piano manufacturer, a reputation earned with an uncompromising commitment to quality appreciated by almost all of the world’s most demanding pianists,” Paulson said.

“We’re fortunate in this case that John is a personal fan of our product. His love for the instrument gives him the insight as to how we can build the business.” said Michael T. Sweeney, Steinway’s chairman and chief executive.

A conversation with Mr. Paulson:

John Paulson – not yet a pianist

Mr. Paulson played the drums, clarinet and saxophone into his 20s, but is not a pianist himself. However, he owns three Steinway grand pianos – models M, O and B – and intends to add a fourth, a model B incorporating a factory-installed player piano system. But since it is never too late to learn to play piano, Piano Street suggests that he skips the fourth self-playing instrument and instead starts taking piano lessons. Not only is it more rewarding to play by oneself, but it would certainly be an advantage for the owner of a such an extraordinary piano maker to know how to really make the instruments sing!

Will you help him?

Not that Paulson cannot afford his piano lessons, but let’s give him a kick start by offering our services:
Anyone concerned about the maintained quality of the world’s leading piano brand, please join us in offering John free piano lessons if he drops by your area. (Post comment below.)

We start by offering Steinway’s new owner a free piano lesson here at Piano Street’s office and studio on Borgargatan 6, Stockholm, Sweden. Welcome in John!


/nilsjohan

  1. Shirley Kirsten Says:

    Location Berkeley and El Cerrito, CA’
    Free lesson offered on my Steinway M vintage grand.. well-maintained

    check my you tube instructions as well

  2. Edie Schmoll Says:

    Fantastic news about Steinway!
    If you visit Southern California, please give me a chance to show you how easy this could be. There are only seven notes, as you are aware;
    and anyone can do it quickly with just the desire.
    Good luck is wished for you by every pianist in the world.

  3. Richard B. Romm Says:

    Thank you SO MUCH for purchasing Steinway. I took lessons through my teenage years, and have always loved the piano. My partner just sold his wonderful Steinway B this year ( payments became unaffordable) after 7 years of proud ownership. Last year when we flew from our home in Oregon to NYC, we had the wonderful privilege of being conducted on a personal tour of the factory in Queens. Therefore we were appalled when we read of possible purchase (and probably move away from New York) of the company…but more important than the possible move, a probably dip i quality. When I watched your video and listened to what you had to say, simultaneously looking at videos of the factory we were just in, it literally brought tears of gratitude to my eyes! I don’t have the talent to give you piano lessons, but you have my undying thanks.

  4. Ian Sinclair Says:

    Mr. Paulson — congratulations on your purchase! I am not a piano teacher by profession, but I would be happy to provide you with what I do know and can should you come my way (northwestern Connecticut, USA) — and give you a chance to play my three Steinways, all antiques. I will also be happy to share some early family tales of Steinway, as one of my great great aunts was associated with the company and the Steinway Artists program in the 1890s.

    Please feel free to get in touch — you can, easily, through Piano Street!

  5. Wendy Herr Says:

    Hello Mr Paulson,
    I have the fortune to own an Essex by Steinway. The original Steinway would be the ultimate, but I am proud to have the Essex. It is a dream to play and has brought out a hidden creativity in me. This piano is very special to me, because playing it was a major part of my recovery from a C2 spinal cord injury. Please continue to offer the affordable, quality Essex line. I invite you you to visit our farm in beautiful Lancaster county, PA and enjoy some of your own creativity on my Essex. I have played for my Amish farrier and his family, and many of my friends and family. I hope to make a CD someday. Congratulations on acquiring a great company. Best Wishes to you, Wendy

  6. Rafael Ribeiro Says:

    Hello there, Mr. Paulson,
    I teach piano at “BSB Musical Lago Norte”, in Brasília, capital of Brasil. If you drop by nearby, just call us. We do have a “free first class” policy there. I bet I have much to learn from you, as well.

  7. Alannah Ong, Q.S.J.M. Says:

    Dear Mr. Paulson,
    Congratulations on your success in owning the most prestigious piano company in the world!
    Whenever you’re in Hong Kong, I’ll be honored to offer you enjoyable piano lessons. Looking forward to creating music together with you – the new owner of the greatest piano company! Please feel free to contact me. My email is alannah.ong@gmail.com, Website: http://www.alannahong.com.
    Wishing you all the best,
    Alannah Ong, Q.S.J.M., Maple Elite Award, B.A.,(Theatre), A.R.C.M., L.R.A.M., Dip. App. Arts..

  8. John Gale Says:

    John Poulson,
    Congratulations on a brilliant acquisition! You are welcome to a free piano lesson in Sydney, Australia anytime you may pay a visit here. I work as an accompanist at the Sydney Conservatorium, where we have a number of Steinways, including, of course, the concert grands.
    What fine instruments they are!
    I always say – if you can’t sound good on a Steinway, try learning something else.
    Good luck with your venture. You’re very wise to retain the existing facilities much as they are.

  9. Susan Hammond Says:

    Welcome and thank you for taking stewardship of such a wondrous and historic company! I’m a Steinway Artist who, while loving practising on her Steinway B, has spent a life observing and taking notes by master teachers. I’d be happy to welcome you to either Toronto or San Francisco for lesson/s. I teach many for free — my give-back for a wondrous life playing Steinway pianos. (Not to put myself in the same category, although I love to play his music, I’ve always liked that about Liszt who taught many pupils for free). As you can see from all these offers, you’re a popular man! Best wishes and I know you’ll love playing these pianos! Sue

  10. Alexander Buskermolen Says:

    Dear Mr. Paulson,

    If there comes an oppertunity where you’ll be visiting The Netherlands, particulalry the Rotterdam area, you’re most welcome to come to my piano studio in the city of Gouda. In my studio I use a blend of piano craftsmanship and modern video techniques for analysis.
    I’d be honored to teach you and show you how modern techniques will change your ways of playing and studying for good. Additionally, I’ll leave you some video instructions on http://www.notefornotes.com, my new business venture in classical music.

    I wish you all the best, in business and in music!

    Alexander Buskermolen
    Classical pianist
    CEO NoteforNotes.com and Lexo Music Poductions

  11. Joseph Starr Says:

    If Mr. Paulson can afford to pay $40.00 a share to own the Steinway Piano Company which totals in the millions , I’m sure he would be willing to spend another $50.00 to take a piano lesson.

  12. Pamela Kalt Says:

    Dear Mr. Paulson, congratulations on taking on the ownership of Steinway and keeping it in the Big Apple!! You certainly have your choice of willing piano teachers so it seems…but let me add my name to the list. I was trained by the indomitable Claudette Sorel at SUNY Fredonia and although she was a Baldwin artist, gave her students an amazing standard to live up to. If you are ever in the New Haven area, I would be honored to give you a lesson on my humble little Kohler & Campbell grand. Best of luck in your new adventure.

    Pamela Kalt
    Aysgarth Piano Studio

  13. Isaac Haire Says:

    Dear Mr. Paulson,

    I appreciate your love of the world’s greatest instrument, and it would be my pleasure to give you some lessons (perhaps at Munich’s Steinway Hall?) if you find yourself in Germany.
    If you are more the analytically type, I’ll be happy to give you some really good, quick and easy composition lessons!

    Cheers!

    Isaac Haire

  14. Myrna Feigenbaum Says:

    Would love to have the opportunity to meet and have you play my 1929 Steinway. If ever in Roswell, GA–north of Atlanta, Georgia, U.S.A.

    Best of luck.
    Myrna

  15. Jamila Sahar Says:

    Greetings Mr. Paulson,

    How are you?
    Please come and visit me in beautiful sunny Boca Raton where I will make you some coffee and play for you JS Bach, Bach/Busoni, Beethoven, Chopin or one of my own arrangements of Brasilian Jazz composer Jobim. Let’s discuss the many similarities of classical and jazz and I will show you how to play Jobim’s ‘The Girl from Ipanema’ or a Bach piece, whatever piece you love and want to play. I want to show you not only how to play the notes, develop dexterity and technique but what true artistry on the piano is.

  16. Deborah Fortier Says:

    I love teaching piano – all ages, all levels. You are welcome to have a lesson with me in my upper west side studio. I guarantee- it would be fun and inspiring!

  17. Simon Ball Says:

    Should Mr Paulson ever be in the UK, he is more than welcome to drop in for a cup of tea and a complimentary lesson on my Steinway O…

    Just as long as he can cope with my being pretty much unable to shut up about how wonderful the company he’s bought is, and imploring him at some length not to compromise on quality one inch! ;o)

  18. Stephanie Wright Says:

    Hi Mr. Paulson! I would love to give you a piano lesson! Please check out my website and let me know what you think. I am actually a traveling piano teacher so I could come to you.

  19. Aaron Masters Says:

    I would be more than happy to give Mr. Paulson a lesson if he ever finds himself in the Western, NY (Syracuse, Rochester, Buffalo, & Niagara Falls) area. I do not have a Steinway (hint, hint) but it would be an honor.

  20. Ernie Mansfield Says:

    Congratulations, Mr. Paulson, on your purchase! Anytime you are in Berkeley, California, please feel free to call for your free lesson!
    Ernie Mansfield, Mansfield Academy of Music, 510-524-2055

  21. Deborah Ponds Says:

    I would like to add my congratulations to Mr. Paulson also for his wonderful decision to purchase the Steinway Piano Company. If you find yourself in the suburban Detroit, Michigan area, I would love to meet with you and offer a basic piano lesson. My lessons are filled wtih fun and enjoyable for all ages. Most conveniently, I live about 1 mile from a Steinway Gallery and perhaps this would give you the opportunity to meet not only myself but also the fine musicians who represent the company on a daily basis.

    Best wishes.

  22. Diome F. Alcomendas Says:

    Please stop by in Vancouver, Washington and I will be happy to give you a Free Lesson from Rach to Rock on my Steinway. Cheers!

  23. Karina Says:

    Congratulations!!!

    I believe that such a company should be private, considering its past and tradition.

    I am sorry, I’m just a student so I cannot give Mr. Paulson piano lessons, but I encourage him on learning how to play the piano, as it is one of the best things in the world!

    Best wishes.

  24. Scott K. Mc Namara Says:

    Mr. John Paulson, Dear John, I would be happy to give you a lesson if you prefer jazz or standards. If your playing golf at Citrus Springs Country Club in Citrus Springs Florida I’m by the par 3 8th hole. It might be better to wait until later January 2014 when my 1933 Steinway Model B arrives, full restoration from Steinway Restoration Center NY, it will also give you an idea of how the top restoration professionals in the world restore your pianos, if you come earlier you will have to suffer on my Steinway model M, Regards Scott

  25. Mark Polishook Says:

    Mark Polishook Studio in Leicester can give lessons to anyone in Steinway Senior Management and would be pleased to do so. I teach over Skype, as well, as in my studio in Leicester. So if schedules can’t align for lessons in Leicester then Skype holds great possibility.

    I’d also be happy to give a group lesson to Senior Management if that was preferable.

    My website is http://www.polishookstudio.com. There you’ll find more information about my specialties and approach.

    All best of luck to Steinway. And I apologise for joining this thread at this late date. But better late than never!

    I look forward to hearing from the Steinway Senior Management Team.

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