Steinway Agrees to Be Bought by Paulson for $512 Million

Steinway Musical Instruments Inc. agreed to be acquired by Paulson & Co. in a deal valuing the 160-year-old piano maker at about $512 million after the hedge fund boosted its offer to trump a competing bid from South Korea’s Samick Musical Instruments Co.

The $40-a-share cash offer from the hedge fund owned by billionaire John Paulson capped a period of more than a month that saw two other rival bids offer less for Steinway. It also topped Paulson’s initial offer this week of $38 a share, which was followed by Samick’s $39-a-share offer, said a person familiar with the process. Waltham, Massachusetts-based Steinway closed more than 3 percent above the offer price, indicating some investors think the bidding war may not be over.