Private equity firm Kohlberg & Co has given up its bid to purchase iconic piano maker Steinway Musical Instruments.
AAP reports that Kohlberg’s decision to quit followed its refusal to match a bid from an unnamed rival.
Steinway said in a securities filing that Kohlberg waived its right to propose a new bid after the competing proposal came to light. This second offer of $US38 per share was higher than Kohlberg's offer of just $US35 per share offer.
In July, Kohlberg offered $US438 million ($A481.64 million) for the company.
Steinway, a company with a famous 160 year history of piano making, said that the new bid came from "an affiliate of an investment firm with over $US15 billion under management."
According to the Wall Street Journal, the bidder is New York-based hedge fund Paulson & Co, which came to the public eye by betting against subprime mortgages ahead of the housing-market collapse.
The bid came during the ‘go-shop period’. This is a time when bids are often not actually expected. The go-shop period is used to ensure that companies can claim that they did everything possible to get good offers for shareholders. It can be a defence against possible law suits.