Paulson & Co. Inc. entered into a definitive merger agreement to acquire Steinway Musical Instruments Inc. (NYSE:LVB) from Samick Musical Instruments Co., Ltd. (KOSE:A002450), Dimensional Fund Advisors LP, ValueAct SmallCap Master Fund, L.P. of ValueAct Capital, LLC, RBC Global Asset Management (U.S.) Inc. and other shareholders for approximately $520 million in cash on August 14, 2013. Under the terms of the agreement, Paulson is required to commence a tender offer to acquire all outstanding shares for $40.00 per share. Paulson will also pay $11.05 million for outstanding options. Paulson has secured committed financing, consisting of a combination of approximately $230 million equity to be provided by Paulson and $360 million debt financing comprising of $185 million first-lien term loan, a $100 million second-lien term loan and a $75 million revolving credit to be provided by Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch and Deutsche Bank Securities Inc. The merger agreement does not provide for a "go-shop" period, but Steinway is permitted to respond to unsolicited offers in certain circumstances, and ultimately, to accept a Superior Proposal until the closing of the tender offer, subject to payment of a termination fee of approximately $13.35 million. The merger agreement also provides that Paulson will be required to pay Steinway Musical a reverse termination fee of $31.15 million. Either party may terminate the merger agreement if the merger is not consummated before December 12, 2013.

The tender offer is required to be commenced within 5 business days and to remain open for at least 20 business days after launch. Any shares not tendered in the tender offer will be acquired in a second-step merger at the same cash price as paid in the tender offer. Upon the completion of the transaction, Steinway will become a privately held company. Steinway's Board of Directors, representing all of the disinterested directors, unanimously recommended stockholders to tender their shares to Paulson. The closing of the tender offer is conditioned upon customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the valid tender of the number of Shares that would represent at least a majority of the outstanding shares Steinway Musical common stock, rights agreement, receipt of German antitrust approvals. The offer is not subject to a financing condition. The transaction is expected to close in late September 2013.

As of September 5, 2013, Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Accordingly, the condition to the closing of the acquisition with respect to the expiration of the applicable waiting period under the HSR Act has been satisfied. The tender offer will expire at midnight, New York City time, at the end of the day on September 18, 2013. The Board of Directors of Samick Musical Instruments passed a resolution for the transaction on September 11, 2013.
Allen & Compan
y LLC acted as financial advisor and Kenton J. King, Alec Y. Chang, David Kitchen, Frederic Depoortere, Jessica A. Hough, Johannes Frey, K. Kristine Dunn and M. Amr Razzak of Skadden, Arps, Slate, Meagher & Flom LLP and John Gaffney of Gibson, Dunn & Crutcher LLP acted as legal advisors to Steinway Musical. Patrick J. Dooley and Ron E. Deutsch of Akin Gump Strauss Hauer & Feld LLP acted as legal advisors for Paulson. Jody Burfening of LHA acted as public relations advisor for Steinway Musical Instruments, Inc. and Dawn Dover of Kekst and Company acted as public relations advisor for Paulson. White & Case acted as legal advisor to Allen & Company LLC. Allen & Company received an advisory fee of $9.75 million.

Paulson & Co. Inc. completed the acquisition of 83.8% stake in Steinway Musical Instruments Inc. (NYSE:LVB) from Samick Musical Instruments Co., Ltd. (KOSE:A002450), Dimensional Fund Advisors LP, ValueAct SmallCap Master Fund, L.P. of ValueAct Capital, LLC, RBC Global Asset Management (U.S.) Inc. and other shareholders on September 19, 2013. The acquisition was effected through a tender offer followed by a merger. The tender offer, which was made at $40.00 per share pursuant to the definitive merger agreement entered into among affiliates of Paulson and Steinway on August 14, 2013, expired as scheduled at 12:00 midnight, New York City time, at the end of the day on September 18, 2013. As of the expiration of the tender offer, a total of 11,005,781 shares of the Company's common stock, representing approximately 83.8% of the outstanding shares on a fully-diluted basis, were validly tendered into and not validly withdrawn from the tender offer. According to the terms of the tender offer, shares that were validly tendered and not validly withdrawn have been accepted for payment In accordance with the merger agreement, the parties subsequently completed the acquisition by an affiliate of Paulson merging with and into Steinway with Steinway continuing as the surviving corporation and an affiliate of Paulson. In the merger, each share of the Company's common stock issued and outstanding immediately prior to the effective time of the merger, other than shares held by Paulson, the Company or their respective subsidiaries, and shares held by the Company's stockholders who properly exercised their appraisal rights under Delaware law, was canceled and converted into the right to receive the $40.00 offer price per share, net to the seller in cash, without interest and less any applicable withholding taxes. The Company's shares ceased trading on the NYSE at the close of market on September 18, 2013, and will no longer be listed.