Why Steinway Is Likely To Be Sold To A Hedge Fund Manager

Steinway & Sons, the 160-year-old musical instrument maker, is set to change hands.

Last month, a private equity firm emerged as the company’s likely buyer. But a mystery bidder — rumored to be hedge fund manager John Paulson — has swooped in at the last minute, and now looks likely to take control of one of the oldest manufacturers in the United States. Paulson made billions betting against the housing market at a time when many thought housing prices could only go up. His reported offer for the company is $458 million.

At first blush, what’s going on with Steinway resembles buyout stories you may have heard before. There’s a devoted factory workforce where you still count as a “new guy” after 16 years. Meanwhile, in an office far from here, the wizards of finance are concocting a takeover.